Oral Answers to Questions

TRADE AND INDUSTRY

The Secretary of State was asked—

Supermarkets

Bob Russell: What powers and responsibilities the Office of Fair Trading has in respect of supermarkets; and if he will make a statement.

Gerry Sutcliffe: The OFT has responsibilities for enforcing UK competition and consumer protection regimes, which include supermarkets. The OFT has announced its decision to consult on a proposed referral of the grocery market to the Competition Commission for a market investigation. The statutory consultation, as required be section 169 of the Enterprise Act 2002, will close on 6 April, and I trust that hon. Members will take part. The OFT is also responsible for monitoring compliance by certain supermarkets with the supermarket code of practice, which was put in place after an earlier investigation by the Competition Commission.

Bob Russell: I thank the Minister for that reply. He will be aware of the recent report by the all-party small shops group, of which I am secretary, which refers to the growing dominance and near-monopoly powers of the four big supermarkets, which mean that there is not so much an un-level playing field as a huge slope. Will the Government take any measures to protect community stores, especially if they believe in sustainable communities?

Gerry Sutcliffe: First, I congratulate the hon. Gentleman and his colleagues on the all-party small shops group on the report, which has highlighted the issues and helped the debate along. It is clear that competition issues must be dealt with through the procedures of the Competition Commission and the OFT, and we look forward to that process. However, the Government will continue to monitor and consider issues relating to consumer policy. We have regular meetings with the British Retail Consortium and small shops groups, and are concerned about what is going on in that sector.

John McFall: The Minister will know that the powers and responsibilities of the OFT extend to credit cards. The latest report indicates that the late payment ruling is an important landmark. Will he engage with the OFT to ensure that late payment charges are reduced so that the consumer feels the benefit?

Gerry Sutcliffe: My right hon. Friend chairs the Treasury Committee, I have had the pleasure of appearing before him, and I am sure that I will have the pleasure again soon. He is right that the issue is causing a great deal of concern, and we are considering the matter with the OFT. All party spokespeople on these issues have met APACS representatives to consider how the banking code applies to those matters.

Peter Bottomley: Do the Government have a view as to the share of the grocery market that supermarkets might reach? Does the Minister have a view on how many convenience stores can be owned by supermarkets in a particular town without affecting competition significantly?

Gerry Sutcliffe: That is why it is important that politicians and politics are taken out of this matter. The competition authorities must consider it in great detail, which is one of the reasons for the referral. When the OFT completes its consultation process, it will decide whether to refer the matter to the Competition Commission. The share of the grocery market will be one of the issues considered.

Andy Reed: Will my hon. Friend ensure that the work done by the Competition Commission on this matter is tied up with his review of Sunday trading liberalisation. If Sunday trading is extended for large superstores, small stores will suffer a further impact. Will he ensure that those two matters are dealt with together?

Gerry Sutcliffe: Co-ordination is important, but the two matters are separate. The OFT is considering supermarkets' share of the grocery market. On Sunday trading liberalisation, the Department of Trade and Industry is going through the process of asking stakeholders for their view. A cost-benefit analysis has been undertaken, the detail of which will be fully transparent. We hope to have a stakeholder event in May, and I am already receiving requests for meetings from bodies with a view on the matter.

Mark Prisk: Further to that point, we welcome the OFT's investigation. As the excellent campaign by the Evening Standard has shown, however, small independent shops are facing multiple threats—certainly from supermarkets, but also from over-regulation, rising crime and the internet. Given the limits of the OFT's powers, will the Minister accept his responsibility and organise a national debate on the future of retailing, and particularly on the future of small independent shops?

Gerry Sutcliffe: As I said, we have that discussion with retail bodies, whether it is the Association of Convenience Stores or the Rural Shops Alliance. I am pleased about the Evening Standard campaign, which is a step in the right direction. What it says to consumers is, "If you value your small shop, spend money in it." That is the basis of the campaign. We should not get into supermarket-bashing. Clearly, consumers will vote with their feet—if they feel that they will get a better deal from supermarkets, they will do so. The whole purpose of the OFT investigation will be to consider the future, such as how to deal with planning matters, and to set the scene for what consumer policy should look like in the next 10 to 15 years.

Mark Prisk: I note the Minister's cautious words, but he knows as I do that the OFT's inquiry will take place in two years. Small shops cannot wait that long. Given that, and the excellent evidence produced by the all-party group, will the Minister—as I said—accept his responsibility, and not follow the discussion but lead it? Will he turn his words into actions?

Gerry Sutcliffe: I am already doing that. It is clear that there must be a division of the process. The competition issues need to be dealt with by the OFT and the Competition Commission, as provided in the Enterprise Act. However, I have already been meeting representatives of the supermarkets and the Association of Convenience Stores, and I am happy to meet officers of the all-party small shops group to keep the issues under review. The referrals are about specific matters; we need to examine the overall issues relating to the future of shops, and I am continuing to do that.

Nuclear Power

Ashok Kumar: What recent discussions he has had with the nuclear industry on preparations for new nuclear power plants.

Malcolm Wicks: There have been many discussions with a wide range of stakeholders, including the nuclear industry, as part of the energy review consultation process, which runs until 14 April. Responses to the consultation will be available imminently on the DTI website.

Ashok Kumar: What discussions has the Minister had with the nuclear industry, and do they suggest that once the review has been completed and if the Government decide to go further down the nuclear route, we shall have the nuclear scientists and nuclear engineers who can design, build, commission and operate plants for the future, given that since the 1980s there has been a great drop in nuclear research and given the fragmentation of the skills base?

Malcolm Wicks: I have had many discussions with the energy industry, including the nuclear industry, about skills and the scientific base. The United Kingdom is a centre of excellence in terms of nuclear science. I recently visited colleagues at Manchester university, for example. There are ideas about establishing a national nuclear laboratory. That is an interesting issue, which is under active consideration.

Edward Davey: Is not the Chancellor's announcement yesterday that he hopes to raise £2 billion by selling shares in British Energy yet another clear indication that Ministers have already made up their minds to build more nuclear power stations? Rather than attacking those who are suggesting credible non-nuclear energy strategies, why are the Government closing their mind to all the other alternatives?

Malcolm Wicks: The Chancellor did not give a figure.

Edward Davey: It was in the Financial Times.

Malcolm Wicks: I regard the Chancellor of the Exchequer, not the pink pages, as my authority figure when it comes to these matters.
	The energy review is considering the advantages and the disadvantages of a new generation of nuclear reactors. They are finely balanced: some issues weigh on one side, and some on the other. The Chancellor's announcement yesterday has no relevance to the decision that we will make in the summer, whether it be yes or no.

Rob Marris: Can my hon. Friend confirm that the building of nuclear power stations is already totally permitted, and any company could apply to build one tomorrow? Fears that have been expressed that following the energy review the Government will somehow go nuclear are misplaced, because the regime is already in place. However, it is not financially viable to build nuclear power stations, and that is the problem with them.

Malcolm Wicks: My hon. Friend is right. There is nothing to stop someone from applying to build a nuclear power station—but people do not do so. I think that that is because, in practice, the Government need to give a green or a red light. I believe that that has been the case in all nations. As for the economics of nuclear power, we hear different opinions. We ourselves are conducting a cost-benefit analysis of different technologies as part of the review.

Tony Baldry: The Minister must know that we have made absolutely no progress over the past 20 years in disposing of nuclear waste. We are no further forward on the question of how we dispose of it than we were when I was doing the job that the Minister is doing today. The Government abandoned the recommendations of the Nirex public inquiry at Sellafield. Can the Minister explain to the House and the country how the Government intend to dispose of nuclear waste? Until they have an answer to that question, any suggestion of future nuclear power stations is simply irresponsible.

Malcolm Wicks: Until recently, over several decades, the record of Government and Parliament on the issue was very poor indeed. In fact, I would go so far as to say that it was irresponsible. I do not know whether that included the hon. Gentleman's term in office. Under this Government, however, we have a two-part strategy. Part 1 involves the Nuclear Decommissioning Authority, with a substantial budget and a remit to clear up the waste on the various nuclear sites. It has begun its work. Part 2 will follow the recommendations of the expert Committee on Radioactive Waste Management, which will publish its work by the summer. That will involve making a judgment about a repository—a long-term or medium-term one—in which to put nuclear waste. So we have a strategy in place—[Interruption.] The hon. Gentleman shrugs, but being the Government who find a solution to this very difficult problem is a key test for this Government.

National Minimum Wage

David Anderson: What assessment he has made of the impact of the national minimum wage since its introduction; and if he will make a statement.

Russell Brown: What assessment he has made of the impact of the national minimum wage since its introduction; and if he will make a statement.

Alan Johnson: The minimum wage has made a real difference to around 1 million low-paid workers each year, particularly women, who make up two thirds of those benefiting. The latest increases, which we announced on Monday, will benefit 1.3 million workers from October 2006. The adult rate will increase by 6 per cent. to £5.35 per hour.

David Anderson: I welcome this news from my right hon. Friend. As someone who originally gave oral evidence to the Low Pay Commission, I am filled with pride at what my party has done. When I recently visited Israel, its Labour party asked me whether we could inform it of our progress with the national minimum wage, because it wants to use our success as a model for Israel. Will my right hon. Friend help me to provide that information?

Alan Johnson: I certainly can help my hon. Friend. A number of countries are interested in our experience, and it has to be recognised that when we proposed the national minimum wage, there were predictions of doom and gloom not just from the Conservatives, but from the Liberal Democrats, who advocated a regional minimum wage. Incidentally, as recently as 2003, they were saying, in the person of the hon. Member for Twickenham (Dr. Cable), that
	"Making a commitment to a two-year deal, at levels significantly above inflation and at nearly double the current level of average earnings growth, sets a dangerous precedent at a time of almost unparalleled uncertainty".
	Now, all the parties agree with the national minimum wage, but every time that we propose increasing it, we once again get these doom-mongers. The way in which the Low Pay Commission has approached the national minimum wage has led to its success—one that countries such as Israel wish to replicate.

Russell Brown: As someone who served on the Committee that considered the National Minimum Wage Bill, I am delighted with the progress that we have made in recent years. My area was badly affected by low pay, and the regional variation proposed by the Liberal Democrats would have done no good whatsoever. I do have anxieties, however, about unscrupulous employers. How many telephone calls have been made to the Government's helpline to report unscrupulous bosses, and how many prosecutions have come off the back of those calls?

Alan Johnson: My hon. Friend raises an important point about enforcement. I do not know off the top of my head the number of such telephone calls, but I do know that the vast majority of employers are complying with the national minimum wage. There is, however, an irresponsible minority, and since the introduction of the national minimum wage, there have been 38,000 investigations identifying more than £22 million in minimum wage arrears. My hon. Friend the Minister for Employment Relations, Consumers and Fair Markets announced last year a new concept of targeted enforcement, whereby we examine those sectors of the economy that our evidence suggests there is a particular problem with. So enforcement is very important, but the encouraging news is that, as I said, the vast majority of employers happily comply with the national minimum wage.

Anne McIntosh: Does the Secretary of State accept that, in his obsession with the minimum wage, he has taken his eye off other low pay issues? Why are women in the civil service earning 25 per cent. less than men?

Alan Johnson: May I gently chide the hon. Lady? We are not obsessed with the national minimum wage, which is important in tackling the very issue that she raises. As I said, two thirds of those benefiting from the increase in the minimum wage will be women. Since its introduction, that gap to which she refers has closed—by some 4 per cent.—but not by nearly enough.
	My right hon. Friend the Chancellor made several important announcements yesterday, including measures to double the number of skills coaches, which was a specific recommendation by the women and work commission; to use the national employer training programme, train to gain, to focus on low skilled women; and to spend £20 million in doing so. A number of other measures will be taken in accordance with other recommendations.
	The hon. Lady is a very decent Member of Parliament—[Hon. Members: "Hear, hear."] I am in that kind of mood today. However, she should stop attacking the national minimum wage, which is what she was trying to do in calling it an obsession, and celebrate it and the contribution that it is making to low pay in this country.

Renewable Energy

Graham Allen: What measures his Department is taking to ensure that the UK meets its target of 10 per cent. of energy being generated from renewable sources by 2010; and if he will make a statement.

Alan Johnson: In 2003, the Government established the renewals obligation to support renewable generating capacity to help us to meet a target of 10 per cent. of electricity generated from renewables by 2010. In addition, we have invested £500 million in capital grants between 2002 and 2008 to encourage research and development and installation of renewables and low-carbon technologies. We are making good progress with more renewable generation in the UK than ever before, but in order for us to go even further the energy review will look at the potential role of a variety of low-carbon technologies, including renewables, in helping the UK meet its medium and long-term energy policy goals.

Graham Allen: Sweden is working towards an oil-free energy policy over the next 15 years, which incidentally will not require any nuclear power stations. My right hon. Friend will know that that topic has potential for immense social division in this country. Will he close the options down when we get to the conclusions of the review and, when the decisions are made this summer, will he take great pains to build a national consensus on the issue so that we may all go forward together?

Alan Johnson: My hon. Friend makes an important point about the experiences of other countries. In the energy review we will look closely at Sweden, and at Finland and other countries that have come up with different solutions. We would very much like to build a consensus. The first part of that is to have a proper review, based on all the evidence available, and then to publish the results, which will determine the future of nuclear energy in this country and will also be focused on other areas, such as renewables and technologies such as carbon capture and storage. We will seek to reach a consensus, not least because those are long-term issues and there needs to be certainty for business that we will carry on in the same direction over the years to come.

Adam Price: The Carbon Trust has estimated that up to 20 per cent. of the UK's energy needs could come from marine energy sources. Can the Secretary of State explain therefore why so many tidal power projects have been rejected by the Department, and in particular the Swansea bay tidal lagoon project, which the Department has condemned out of hand as prohibitively expensive?

Alan Johnson: I do not accept that we have not supported wind and tidal power. There has been a focus on wind, both offshore and onshore, but the technologies for both are more at the drawing board stage, compared with some of the others. We have announced a £50 million contribution to wave and wind power, and the marine Bill, to be introduced by the Department for Environment, Food and Rural Affairs, will tackle some of the planning issues that have emerged. I do not accept the criticism that the hon. Gentleman makes, but I do accept his point that wind and wave power is a crucial aspect of our energy future.

Mark Lazarowicz: My right hon. Friend will know that a debate is taking place at European level about whether the EU target for renewables should increase to 15 per cent. by 2015. Can he assure the House that the British Government are actively seeking that higher EU target and will they press for an even higher target in the future?

Alan Johnson: That would cause us no problem whatever, given that our aspiration is to reach 20 per cent. in the UK by 2020. Because businesses need to see the long-term future of their investments, the further away we can set realistic targets the better. I congratulate my hon. Friend on his private Member's Bill, which will make a significant contribution to that whole area of renewable energy, if we can remove the blockage from the Opposition.

Hon. Members: Where is he?

David Heath: The Budget announcement yesterday is good news for microgeneration. Does the Secretary of State accept that there are three issues relating to microgeneration? The first is to encourage research and production, the second to make it economically viable for the consumer, but the third is to remove the obstacles of regulation, whether through licensing or planning, that prevent people from installing sensible microgeneration schemes. Can he do something about that?

Alan Johnson: The hon. Gentleman mentioned three obstacles and I agree with him, but he could have added a fourth—the right hon. Member for Bromley and Chislehurst (Mr. Forth).
	Next Wednesday, we shall be publishing our strategy on microgeneration, which will include the very issues that the hon. Gentleman raises, especially about renewables. I agree that yesterday we heard good news: another £50 million on microgeneration, with the £30 million already provided, really puts serious money behind that important aspect of our energy policy.

Manufacturing

Vera Baird: What recent assessment he has made of the state of the UK's manufacturing sector.

Alun Michael: Manufacturing contributes a sixth of our national wealth, employs more than 3 million people directly and supports a further 2 million people in the service sector. In a tough competitive environment, our manufacturing industry shows many success stories based on high value-added, high skills and high technology.

Vera Baird: The Tees valley economy is more dependent than most on manufacturing and processing. The new chair of our local chamber of commerce regards our economy as robust, and up to 10 investments are proposed in manufacturing and processing in my sub-region. However, the short-term problem, which faces the chemical manufacturing industry in particular, remains high energy prices; indeed, one plant in my constituency, at Wilton, has had to close temporarily due to that problem. Has my right hon. Friend any advice for that important industry about better prospects in the near future?

Alun Michael: I agree about the importance of the sector, and it is good to hear optimism from parts of the industry in my hon. and learned Friend's region, which very much needs the strengths of our modern, manufacturing industry. Energy prices are certainly an issue for many parts of our industry, including, as my hon. and learned Friend says, the chemical sector. That is why it is such a high priority for the Government to tackle both short and long-term energy needs and why the energy review was set up. The situation is hitting industries in other parts of Europe, too, so the best advice I can give is, "Hold your nerve."

Peter Luff: I declare a non-pecuniary interest as chairman of Worcester cathedral council.
	Does the Minister agree that one of the problems facing British manufacturing industry is the unintended consequences of regulation? In that context, will he look at the impact of the European Union directive on the restriction of hazardous substances on a small but important British industry—organ building? Does he understand that the regulation will have the effect, if implemented as currently intended at the beginning of July, of destroying the industry, making it illegal to build new organs, such as the one we are planning for Worcester cathedral, and actually making it illegal for Durham to reconstruct the cathedral organ, which is currently lying in pieces in the cathedral?

Alun Michael: One of the great problems is the pessimism of people such as the hon. Gentleman. The directive to which he refers will not have an impact on the refurbishment or maintenance of existing organs, whether or not they have electronic components—the issue that has been raised. The pipe organ industry can apply for an exemption for new electronic organs and the Government are happy to continue to provide information to help it to do so. DTI officials have been in regular contact with those concerned and will be meeting the sector soon, so I trust that the hon. Gentleman will now become more optimistic about the future.

Jim Cunningham: I am sure that my right hon. Friend is aware of the concern about the lack of investment in manufacturing skills and research and development in the west midlands, and we have seen the motor car industry in Coventry diminish greatly. Can he enlighten us about what is happening regarding Peugeot in Coventry?

Alun Michael: As my hon. Friend knows, I have been in contact with the company and have met Mr. Folz, who heads it. We maintain regular contact and hope very much indeed that its engagement and production will continue in this country. Indeed, at the meeting that I had with Mr. Folz, he went out of his way to reassure us. Clearly, we are aware of the rumours and the concerns in my hon. Friend's constituency and in the wider region. That is why we maintain close contact with the company and will continue to share and communicate with Mr. Folz and his colleagues on these issues.

Mr. Deputy Speaker: Order. May I just point out to Ministers that, if they turn their heads to their Back Benches, they go off microphone, which makes it very difficult for the Official Report?

David Simpson: According to the Federation of Small Businesses this morning, the scheme that operates for the manufacturing companies in the United Kingdom, whereby they can claim up to a 50 per cent. reduction on their rates, does not apply to Northern Ireland, although it is part of the United Kingdom. Can the Minister explain why?

Alun Michael: The simple answer is no. I leave matters that relate to Northern Ireland to colleagues who are responsible for them. However, support for manufacturing industry—for example, with the R and D tax credit—is generally available. There are many levels of support for manufacturing industry in every part of the United Kingdom, and I am afraid that questions of anomalies that relate to Northern Ireland are matters that the hon. Gentleman should take up with the relevant Ministers.

David Kidney: When I speak to manufacturers, I find that most of them are aware of the climate change levy and red tape, which could hold them back, but fewer of them seem to be aware of the R and D tax credit and the existence of the manufacturing advisory service, which could be of great benefit to them, and both of which the Chancellor announced were being extended yesterday. Does my right hon. Friend agree that he, his Department, ourselves as Members of Parliament and local chambers of commerce could do more to raise awareness of those two helpful benefits for manufacturers?

Alun Michael: My hon. Friend is absolutely right, and I try to give such encouragement—I did so yesterday when the FSB published its review of its members responses, which demonstrated, for example, that 4 per cent. of its members make use of Business Link, which is an interesting statistic, given that 96 per cent. of the people who use that service are satisfied with it and would advise others to use it. The benefit of the manufacturing advisory service is that it has put £213 million into the bottom line of manufacturers in this country, whereas the R and D tax credit has provided £795 million of support for small and medium-sized enterprises, apart from the support for large businesses. Anything that my hon. Friend and hon. Members on both sides of the House can do to help the success of our manufacturing industry by indicating the support that is available would be very welcome.

Alan Duncan: Is it not undeniable that the number of jobs in the public sector has increased by more than 600,000, which is more than the population of Sheffield, while the number of jobs in manufacturing, which helps to pay for public sector jobs, has fallen by well over 1 million? Many companies have massive pension fund deficits. They face ever more burdensome regulation, and their corporation tax liability was not even inflation indexed in yesterday's Budget. Does the Minister agree with the Leader of the House, who said that
	"Metal-bashing is no longer a vital national asset",
	or with the Prime Minister, who said that
	"A robust manufacturing base is a crucial element in a modern competitive economy"?

Alun Michael: Funnily enough, I agree with the Prime Minister. The hon. Gentleman seems to see a contradiction between those two remarks; I do not think that there is one. Where it is necessary for our industry to compete—and it is competing—is at the high-level, high-skill, high-value-added end of industry, and in that context, the Leader of the House is right. The hon. Gentleman talks down British industry. About two thirds of the new jobs in this country have been in the private sector, and we have seen considerable success in our manufacturing industry, despite the fact that the number of people employed in it has fallen, as it has in every developed country.

Alan Duncan: The climate change levy was supposed to be revenue-neutral on the grounds that it also reduced employers' national insurance contributions. Since its introduction, both NICs and the levy have gone up. If the levy is genuinely to be a tax on climate change, not just a tax on energy use, surely all logic should compel the Government to design a system that constrains emissions, rather than just clobbers manufacturing. In what possible sense does the climate change levy distinguish between those who use energy that does produce emissions and those who use energy that does not?

Alun Michael: That sounded like an essay, rather than a supplementary question. The fact is that about 40 per cent. of the reduction in carbon has come from precisely the approach that the hon. Gentleman criticised, which is why we have succeeded in relation to the Kyoto agreement. It would be good if he pointed to the way in which the Government are supporting manufacturing industry and pointed industries in the direction of the help that is available to them, rather than seeming to want to undermine the success of manufacturing industry in this country.

Gas Prices

Eric Illsley: If he will make a statement on gas prices in the UK.

Andrew Selous: If he will make a statement on domestic gas prices.

Malcolm Wicks: I take the recent increases in gas prices very seriously and the Government are very concerned about their impact on industrial competitiveness and vulnerable households. I therefore welcome yesterday's announcement by the Chancellor that there will be an extra 250,000 subsidised installations of home insulation over the next two years. In the past year, global fossil fuel prices have increased, which has fed through to the UK. Prices have been particularly volatile this winter because of tightness in the market.

Eric Illsley: My hon. Friend must feel like the character in the film "Groundhog Day" in that every day he wakes up to increasing gas prices. Gas prices recently have been at a level that is a threat to industry, particularly in my constituency. Companies such as the Carlton brickworks and two glass companies, Potters Ballotini and Redferns, are seriously under threat because of the level of gas prices. Although I welcome the fact that the European Union is now considering energy and our Government are undertaking a review, will he do something in the short term to investigate why prices here are so high and why the differential between the UK and Europe is so great?

Malcolm Wicks: I do look at gas prices and gas supply every day, but the sun is shining, soon there will be a host of golden daffodils and we will be out of the worst of this winter. The heavy users of gas and electricity, who use energy as part of the manufacturing process, have been hit very hard. For that reason, we are doing many things. We are pushing forward with the argument for market liberalisation in the European Union and I welcome strong reports from two European commissioners about that and the Chancellor's statement yesterday. Over the next year or so, there will be more infrastructure to bring liquefied natural gas into this country. The Langeled pipeline will bring a great deal of gas from the Norwegian fields.

Andrew Selous: Before the Minister waxes too lyrical about daffodils, perhaps he would like to reflect on the fact that many pensioners and low income households use pre-payment meters to pay for their gas. I have had complaints from many of my constituents that they not only pay more for their gas than direct debit customers but have not been able to take advantage of the recent price freeze offered to direct debit customers. Given the recent huge price rises, will the Minister take action to ensure that all customers are treated fairly?

Malcolm Wicks: The issue affecting vulnerable people, particularly the older elderly community, is a subject close to my heart and one in which I am very interested. I could write a book about it—indeed, I did. We need not be complacent, which is why I was so pleased by the Chancellor's announcement yesterday. We must attack the issue in different ways: first, through income maintenance proposals, such as winter fuel payments, and by targeting pension credit on the vulnerable; secondly, by making sure that the homes of the vulnerable become energy efficient, hence the warm front proposal; and, thirdly, by working with supply companies so that their social tariffs are intelligible to customers. I am talking to the supply companies about whether there could be some rationalisation so that the tariffs could be better explained.

Alan Simpson: I am not sure that the host of daffodils will come as a great comfort to the 2 million people in Britain who have been thrown back into fuel poverty as a result of the 80 per cent. increase in gas prices since 2003. I welcomed the Chancellor's announcement yesterday about the 250,000 people who will get additional help under the warm homes programme over the next couple of years, but what discussions is the Minister having with the industry so that the 2 million people who have been thrown back into fuel poverty can be taken out of the equation and the Government can thus meet their commitment of removing all vulnerable households from fuel poverty by 2010?

Malcolm Wicks: We are discussing that with the industry and social policy on energy is a key feature of the energy review. As I said earlier, the issue is crucial, but we need to think about the threefold strategy that I instanced. At the moment, the oldest among the elderly are still the most likely to live in the poorest homes for energy efficiency, but it is especially important that through the warm front initiative and the so-called EEC obligation—energy efficiency commitment—on the industry, we ensure that good insulation, draught-proofing and decent boilers and heating systems become a right for the most vulnerable in this country.

Michael Weir: The Minister might be wandering through hosts of golden daffodils, but in parts of Scotland there is still snow on the ground and freezing weather. The Chancellor yesterday pegged the winter fuel allowance at £200, and the Minister will be aware that the recent Trade and Industry Committee report on gas prices expressed disappointment about the lack of progress to deal with other vulnerable groups. Does the Minister accept that £200 is totally inadequate, given the recent huge rises in gas prices, and will he press the Chancellor to increase the allowance and extend it to other vulnerable groups in society?

Malcolm Wicks: I accept that there are no grounds for complacency because even in mild winters too many of our elderly people suffer from cold conditions. There is no room for argument about that, so we cannot be complacent and have to move forward. However, I also accept that the Government have done more than any other Government to tackle the problem. The number of people in fuel poverty was reducing until the worldwide increase in fuel prices hit domestic consumers and industry. We are working hard to find out what can be done about that. It is a crucial aspect of the energy review, and it remains a stain on our society that we have not fully tackled the problem. I am pleased about the progress, but there is much more to be done.

World Trade

Ann McKechin: If he will make a statement on the progress made at the recent London meeting on the World Trade Organisation Doha round.

Ian Pearson: At the meetings in London between 10 and 12 March, negotiators from the EU, US, India, Brazil, Australia and Japan engaged positively on the substance of the Doha development agenda, but failed to make a breakthrough in the talks. The Government remain committed to seeing an ambitious, pro-development outcome to the DDA by the end of the year and will do their utmost to bring that about.

Ann McKechin: The Minister will be aware of growing pessimism about the prospects for success in the current WTO round. Does he agree that if we are to correct the imbalance in world trade, EU Ministers should seriously consider increasing their offer when they meet this weekend, rather than simply calling for concessions from developing nations?

Ian Pearson: I know that my hon. Friend takes a great interest in these matters. Indeed, she was in Hong Kong, so she will appreciate some of the difficulties with the dynamics of the negotiations. There is growing recognition that we have perhaps gone as far as we can by taking incremental steps. What is needed now is the political will for us all to jump together. It is quite clear, from a European perspective, that countries such as Brazil, India and others in the G20 need to move on non-agricultural market access and services. It is also clear, from the UK perspective, that if they move, Europe should be able to move further on agricultural market access than it has done. We all need to choreograph this and jump together. We also need movement from the United States, Japan and others if we are to get a successful pro-development outcome to the round.

David Heathcoat-Amory: As the Minister knows, the EU has proposed steep tariff increases on imported shoes from China and Vietnam. That will raise the price of shoes in this country and damage Clarks Shoes, which is based in my constituency. How did the United Kingdom representative vote in the committee that considered those tariff increases?

Ian Pearson: I am certainly aware of the problem. Indeed, I met the chief executive of Clarks Shoes only recently to discuss the situation. He was very pleased that the UK Government had lobbied on behalf of Clarks and other manufacturers to exclude athletic footwear and children's shoes from the increases. We judged it best to negotiate with the Commission rather than oppose the increases from the outset so that we can secure improvements. It is very much a tactical issue, and we abstained from voting.

Sub-post Offices

Matthew Taylor: How many sub-post offices have closed since 1997.

Barry Gardiner: Under Post Office Ltd's urban reinvention programme, 2,475 sub-post offices closed on a wholly voluntary basis, thereby strengthening the viability of the remaining urban network while ensuring that at the end of the programme over 99 per cent. of the population nationally still lives within one mile of their nearest post office. Outside the urban reinvention programme, 2,248 post offices closed between April 1997 and December 2005, as sub-postmasters retired or sold their premises but were unable to persuade anyone to take on the running of that post office as a viable commercial venture.

Matthew Taylor: The Minister is presumably aware that across the country tens of thousands of pensioners are trying to support their local post offices and keep them open by using the Post Office card account. He may think it is right to close those post offices in 2010 and to write to pensioners urging them to change to a bank account, but I do not agree. Does he condemn the fact that the Pension Service is trying to frighten vulnerable pensioners into closing their accounts by sending them a letter that says that
	"If Pensioners carry large amounts of cash they are vulnerable, and over 100 are mugged a week for their benefit. Most of the Post Offices pay customers all the benefit and therefore if the customer only wanted part of it they cannot pay it back into the account. With a Bank account they can draw as little or as much as they want"?
	That is an attempt to scare pensioners, and a Government service should not tell people who are trying to support their local post office that they might be mugged as a result.

Barry Gardiner: The move to direct payment was absolutely right, as it has cut crime and benefit fraud. Since 1993, the percentage of pension and benefit recipients using direct payment has risen from 43 per cent. to 97 per cent., suggesting that it is people's preferred method. The saving for the taxpayer will be £1 billion to 2010. The Post Office card account was intended to help people without bank accounts to make the transition from order books to direct payment. More than 4 million people, as the hon. Gentleman suggested, still use a Post Office card account, but 70 per cent. of them have bank accounts too. Given that it costs the Government 100 times more to pay benefit through the POCA than by direct payment the taxpayer is entitled to expect us to examine it very closely indeed. As for the hon. Gentleman's question about whether—

Mr. Deputy Speaker: Order. Answers are becoming far too long.

Emerging Technologies

Laura Moffatt: What support his Department gives to companies developing emerging technologies.

Alun Michael: If I gave the full list, I would exceed the time available and test your patience, Mr. Deputy Speaker, which I would not wish to do. The Department provides a range of grants and manages the technology programme. We promote knowledge transfer, we provide practical advice through the business link network and we help UK experts to visit overseas centres of expertise. I shall write to my hon. Friend with full details, and place a copy in the Library of the House.

Laura Moffatt: I am grateful for my right hon. Friend's response, as companies such as Ceres Power in my constituency are developing fuel cells. The company is working hard to make sure that we develop new technologies, but it is not attached to a university, so it finds it difficult to access certain grants. I welcome the Chancellor's statement yesterday on further support, and I hope that many such companies become much more aware of what is available. However, I look forward to receiving my right hon. Friend's letter, so that I can tell them about those opportunities.

Alun Michael: I am happy to expand on those points. The grant for research and development provides the type of response that is appropriate to the individual company—for example, micro projects with simple low cost development projects; research projects involving a range of planned research; and development projects involving the shaping of industrial research. Exceptional projects involving technology developments that have higher costs and a more strategic focus are also available. At every level there should be a product that would assist the firm to which my hon. Friend refers.

EU Gas Market

Stephen Crabb: What discussions he has had with European ministers on liberalisation of the gas market in the EU.

Malcolm Wicks: I will not add to what I said earlier about gas prices, except to say that they have increased across the whole of Europe. There is a huge global demand for energy and, in addition, we have a tight situation in the UK as we wait for the new infrastructure to bring in liquefied natural gas—the pipelines that I mentioned earlier from Norway, and so on. It is a difficult time, not least for heavy users of gas and electricity that choose to buy on the spot market, short term.

Stephen Crabb: As regards taking action in Brussels, is the Minister not concerned that current trends on the continent point not to further liberalisation, cross-border mergers and greater transparency, but to the rise of national monopolistic giants, which have proved to be roadblocks to investment in transnational infrastructure, greater liberalisation and lower gas prices in the long term?

Malcolm Wicks: The hon. Gentleman puts it well. Market liberalisation is European Union policy. Competition will bring lower prices. It is good for the German consumer and for the British consumer. The two commissioners have issued strong reports on the subject. They are determined to take legal action to bring about market liberalisation, and the hon. Gentleman will have noted the Chancellor's statement yesterday that at the European Council we are pressing for independent investigation and enforcement.

MINISTER FOR WOMEN

The Minister for Women and Equality was asked—

Positive Role Models

Tony Lloyd: What steps the Government are taking to provide positive models of the role of women in society.

Meg Munn: We have used positive role models very effectively, notably in science, engineering and technology. I recently spoke at the UK Resource Centre annual conference, which unveiled portraits of six inspirational women in science, engineering and technology, creating a legacy for future generations. The centre has also launched the GetSET Women database, providing access to thousands of female role models and mentors.

Tony Lloyd: I welcome my hon. Friend's positive comments. Does she agree that a necessary part of providing positive roles for women is getting rid of the negative images of women, especially those portraying women as willing or at least acquiescent victims of domestic violence, violence and rape? Will she make it clear that our Government will have no truck with those who suggest reduced sentences for the perpetrators of violence against women, particularly rape?

Meg Munn: The Government are playing an active role in tackling all aspects of violence against women. The information about sentencing was leaked. The guidelines for sentencing have not been issued. They will be produced later this year by an independent body and the Government will respond. The Government take rape extremely seriously. We will do all we can to combat this heinous crime and to ensure appropriate sentences for those who commit it.

Jo Swinson: I am sure the Minister will join me in congratulating the positive women role models in sport, such as Olympic medallist Shelley Rudman, our 56 women Commonwealth medallists from the home nations so far, and the five courageous competitors in "The Games" who are women, including my hon. Friend the Member for Falmouth and Camborne (Julia Goldsworthy). Is the Minister concerned that awards worth £3.8 million are made to elite male athletes—over 50 per cent. more than the £2.3 million in awards to women athletes? That entrenches the existing male bias in sporting role models.

Meg Munn: I welcome the hon. Lady to her new position. I am not sure whether the Liberal Democrats are appointing anyone to deal with women's issues—

Edward Davey: indicated assent.

Meg Munn: Perhaps we will find out later who that is. The Chancellor announced yet more money yesterday for investment in sport and to encourage everyone to get involved in it. On role models in sport, some of our best athletes at the last Olympic games were women—Dame Kelly Holmes, for example. We will continue to ensure that women get the opportunities that they need to do well in international athletics.

Sharon Hodgson: Does my hon. Friend agree that, in all that they do, every woman Member of Parliament can be a positive role model for women? As eight women from the Gateshead young women's project are observing our proceedings here today, does my hon. Friend agree that women Members in their places today are indeed acting as a positive role model for women generally?

Meg Munn: I thank my hon. Friend for her question and I agree that every woman in the House should be a role model for women generally, particularly for younger women. I welcome the fact that my hon. Friend's constituents are here to observe us today. It is enormously important to encourage more women to get involved in politics, so it is crucial that they have every opportunity to come here and are not prevented from doing so by old-fashioned practices that work against them.

Angela Watkinson: Is it not the height of hypocrisy for the Government to encourage others to provide a positive role model for women in society when its own splendid Minister for Women and Equality is the only Minister not to receive a ministerial salary?

Meg Munn: The hon. Lady is incorrect, as five Ministers do not receive salaries. I am not responsible for ministerial pay, but I wish that I had a pound for every time that I have been asked that question.

Eleanor Laing: I agree with everything that the Minister has said so far, but does she agree that the lack of role models is not the main problem for women in our country today? There have been many role models in this place—Barbara Castle, Shirley Williams and, the greatest of all, Margaret Thatcher—but that is not the key problem. What are the Government going to do about breaking down the barriers that prevent women from following their role models, whether it be in business, science, teaching or other professions? The Chancellor was vague about that matter yesterday.

Meg Munn: Committing millions of pounds to help women back into employment—and to woman returners, generally—is not what I would call vague. The hon. Lady will be aware that the women and work commission recently reported and recommended a range of measures to tackle the pay gap and to ensure that women get through the glass ceilings—or off the sticky floors, as we say—and overcome the barriers. The Government are considering all the recommendations carefully and will respond in due course.

Sex Industry

Peter Bone: If she will make a statement on the Government's policy on tackling the trafficking of women for work in the sex industry under compulsion.

Meg Munn: The Government are committed to tackling effectively all aspects of human trafficking, especially trafficking for sexual exploitation. We are currently consulting on the draft UK action plan, which outlines what the Government have done so far and proposes areas for future work.

Peter Bone: I very much welcome the Minister's response but, 200 years after we abolished slavery, there is still this despicable trade in young women, who face enormous violence and cruelty. One thing that the Government could do quickly to improve the situation is to sign the European convention on action against trafficking in human beings. I urge them to do that quickly.

Meg Munn: I have to disagree with the hon. Gentleman because signing that convention would make no difference to the actions that the Government are taking. The Government already have a comprehensive range of measures both to prevent and to deal with the problem of human trafficking. We are concerned about one aspect of the convention—that the automatic reflection period may be a pull factor in respect of immigration—but let me assure the hon. Gentleman that the case of every victim of trafficking is considered on its merits and that reflection periods are granted. We are further considering what needs to be done and I urge all hon. Members who are rightly interested in the problem to respond to the consultation.

Vera Baird: The convention is very important, of course, but the Government have launched an initiative to try to unite the travel industry, immigration services, police and port authorities in offering early contact for victims of trafficking who are arriving in our country without the language, without a friend and without a single contact, and are perhaps beginning to appreciate what their fate is. That is a laudable initiative, and I applaud it. What will happen to women who take the opportunity to make the contact that is offered? The Poppy project, which is a very good shelter and support project for women—

Mr. Deputy Speaker: Order. That is quite long enough. I think that the Minister will have got the point.

Meg Munn: When a woman makes it known that she is in that situation, the police need to become involved. Support is provided and her situation is considered, and then a plan is developed to enable her, with help and assistance, and in her own time—we recognise that the situation is often very traumatic and that women need time to reflect—to give her evidence so that we can track down the traffickers. We have a multi-agency taskforce in place and we will continue to work seriously on tackling this dreadful crime.

People Trafficking

Jim Sheridan: What discussions she has had with the Home Secretary on improving the support and assistance given to victims of trafficking who agree to help the authorities in a prosecution case against those who trafficked them.

Meg Munn: As a member of the ministerial group on human trafficking, I work closely with Home Office colleagues to ensure that provision for victims is sensitive to women's needs. That includes reflection periods offered on a case-by-case basis. Our consultation on a UK action plan, which covers labour and sexual exploitation, includes proposals that will further protect and support victims.

Jim Sheridan: My hon. Friend will be aware that today two people have been arrested in Glasgow for human trafficking. I congratulate the authorities on bringing them to justice and I hope that the law is reflected in the sentences. What training do the authorities, particularly the police, get on dealing with women and young girls who are traumatised by this horrible crime?

Meg Munn: The range of training is important. We are undertaking work to ensure that a wider number of police are aware of the issues involved and trained in such a way that they will respond sensitively. We also have groups of police officers who work with other people to ensure that they can respond appropriately as regards women being brought into the country and women who are already here working and being exploited.

Business of the House

Theresa May: Will the Leader of the House give us the business for the coming weeks?

Geoff Hoon: The business for next week will be as follows:
	Monday 27 March—Continuation of the Budget debate.
	Tuesday 28 March—Conclusion of the Budget debate.
	Wednesday 29 March—If necessary, consideration of Lords amendments, followed by consideration of Lords amendments to the Immigration, Asylum and Nationality Bill.
	Followed by consideration of Lords amendments to the Natural Environment and Rural Communities Bill.
	Followed by consideration of Lords amendments to the Consumer Credit Bill.
	The House may also be asked to consider any Lords messages which may be received.
	Thursday 30 March—Motion on the Easter recess Adjournment.
	Friday 31 March—The House will not be sitting.
	The provisional business for the following week will include:
	Tuesday 18 April—Second Reading of the Commons Bill [Lords].
	It may also be of interest to Members to know that the business in Westminster Hall for April will be:
	Thursday 20 April—A debate on the report from the Science and Technology Committee on forensic science on trial.
	Thursday 27 April—A debate on the report from the Public Administration Committee on reforming the honours system.

Theresa May: I thank the right hon. Gentleman for giving us the business for the coming weeks, which, as he announced, includes debates on the Budget. I understand that nothing will be said about the health service during those debates because there will be no speech from the Health Secretary. Last week alone, 2,000 NHS jobs were cut, including doctors and nurses, but the Chancellor had nothing to say about the health service. When I have raised these NHS cuts in the past, the right hon. Gentleman's response has been, "Don't you think financial management is important?". Of course it is, but we need a debate on what has caused the cuts.
	Yesterday, the Royal Free hospital in Hampstead announced 480 job cuts and Geoff Martin, head of campaigns at London Health Emergency, said that that explained why the Chancellor had
	"body-swerved the NHS question . . . Sacking nurses never looks good for the Government."
	I am interested in his comments, because I remember him when he was a Labour councillor in the London borough of Merton. Government targets and bureaucracy lie behind those cuts. That is why they are genuinely Brown's NHS cuts. Let us fill in the gap that the Chancellor left in the Budget and have a debate on the NHS.
	Some cuts are also being made in mental health services. In the Adjournment debate on Monday, the Minister of State, Department of Health, the hon. Member for Doncaster, Central (Ms Winterton) stated:
	"Surveys show that only 11 of a total of 84 trusts have considered making small cuts in mental health services."—[Official Report, 20 March 2006; Vol. 444, c. 132.]
	Today there is a written ministerial statement on mental health legislation, but according to the radio this morning, the Government will scrap the Mental Health Bill, little more than a month after our debate on mental health, when no mention was made of scrapping the Bill. Again, we learn more about the Government's actions from the media than on the Floor of the House. The Secretary of State for Health should make an oral statement on mental health services next week, so that she can be questioned by hon. Members and held to account for her actions.
	Today, the Prime Minister is making a written statement on an independent adviser on Ministers' interests. I welcome what appears to be his change of heart. However, we have called for an independent review of the ministerial code for four years. Indeed, I repeated that call yesterday in Westminster Hall. Will the Prime Minister make an oral statement on that and confirm that the Chancellor played an active part in Cabinet debates on the matter? It is another subject on which the Chancellor has been strangely silent.
	Today the chairman of Capita, Rod Aldridge, who lent money to the Labour party, resigned. Last year the Chancellor appointed him to chair his commission on youth volunteering. Will the Chancellor make a statement on Capita's links with the Government?
	The Chancellor mentioned equal pay yesterday. He said:
	"I can today announce new help for working women who want a wider range of career choices offering higher earnings and to close the pay gap with men."—[Official Report, 22 March 2006; Vol. 444, c. 293.]
	To follow up the questions that have just been asked to the Minister for Women and Equality, does that mean that the Chancellor will close the 49 per cent. pay gap that exists for that Minister? After all, there is still no Chancellor of the Duchy of Lancaster, and the Department for Transport is one Minister down, so the money is available. May we have a debate on levels of pay? During it, we could perhaps discuss the pay offer in a Labour party advert last week, offering £28,000 to £32,000 for
	"an experienced, successful, highly motivated and dynamic fundraiser to secure significant funds for the Labour Party."
	That individual will be
	"involved in all aspects of our key donor fundraising work where you will be expected both to initiate ideas and fulfil expectations."
	We all know what those are. It is time that that the Prime Minister came to the House and explained himself.

Geoff Hoon: First, the right hon. Lady referred to the Budget debate. There will be a debate today, which will continue on Monday and Tuesday. There will therefore be every opportunity for hon. Members to raise any issue that they wish, not least the excellent funding that the NHS receives. As my right hon. Friend the Chancellor made clear, an extra £6 billion will be put into the NHS next year and a further £6 billion the year after.
	If Conservative Members genuinely believe that that extra money should not be spent on the health service, they need to make it clear—rather clearer than the shadow Chief Secretary, the hon. Member for Chipping Barnet (Mrs. Villiers), speaking on Sky News yesterday. When she was asked:
	"So therefore compared to what he"—
	the Chancellor—
	"is planning on spending you would be spending less?"
	the hon. Lady replied:
	"Um . . . It's . . . It would certainly . . . Yeah, yeah, undoubtedly that could be a possibility".
	What a lamentable performance from someone who apparently aspires to run the British economy. Perhaps that explains why she has been pulled from the Budget debate and is not replying to it, as traditionally happens.
	Indeed, the shadow Chancellor, the hon. Member for Tatton (Mr. Osborne), is not opening the debate either, as would normally be the case. Instead, we have the right hon. Member for West Dorset (Mr. Letwin)—I am delighted to see him on the Front Bench—who will no doubt be declaring his considerable interests when he gets up to open the debate, having refused to abandon his connection with the City when he moved jobs. It would seem that he is now back in the same job, without having given up his interests in the City, so we are not going to take any lectures from the right hon. Member for Maidenhead (Mrs. May) about interests. She referred to the chairman of Capita, and we know that he made a loan to the Labour party because the Labour party published that information. If the Conservatives are so keen on transparency, perhaps they should publish their list of donors. So far, however, we have not heard from them.
	The right hon. Lady asked for a debate on mental health. The Minister of State, Department of Health, my hon. Friend the Member for Doncaster, Central (Ms Winterton) has issued a written ministerial statement on that subject, as has my right hon. Friend the Prime Minister on the subject of independent advisers. My right hon. Friend the Chancellor of the Exchequer made clear yesterday the Government's commitment to reducing the gap in women's pay, which we have consistently been committed to doing.

David Heath: The whole House will wish to welcome the release of Norman Kember and the other hostages this morning. Next Monday will be the third anniversary of the start of the Iraq conflict, so perhaps this is a good opportunity for me to ask the Leader of the House again whether it is time for a debate on the political situation there. We simply never discuss the matter, which seems entirely wrong.
	May we also have a debate on ministerial announcements to the House? It has long been a tradition that the Speaker has deprecated the release of material to the press before the House has been properly informed, yet Ministers carry on doing it. The most important information is that contained in the Budget, yet yesterday's Evening Standard, which was published on the morning of the statement, carried headlines about the additional cash to schools. It also said:
	"Speaking exclusively to the Evening Standard before briefing the Cabinet this morning",
	before going on to quote the Chancellor of the Exchequer. There was a time when that would have been a sacking offence, and we should have a debate on the matter.
	The right hon. Member for Maidenhead (Mrs. May) has already mentioned the dropping of the Mental Health Bill. Many organisations are worried that the most objectionable aspects of that Bill will now be introduced as tack-ons to other legislation. May we have a clear statement of the Government's intentions for legislation in that area?
	Lastly, may we have a debate on Cabinet vacancies? The right hon. Member for Maidenhead mentioned that we had now waited four months for an appointment to the splendid office of Chancellor of the Duchy of Lancaster—although I understand that the Chancellor of the Exchequer expressed an interest in the job yesterday. We have also waited a month since the Prime Minister announced with some fanfare that he was going to create a Secretary of State for social exclusion, and would have an imminent reshuffle to bring that new post about. As the Prime Minister is increasingly being shunned by those on the rich list, that could be the perfect retirement job for him—but I think that we should have a debate on the matter.

Geoff Hoon: I am grateful to the hon. Gentleman for raising Norman Kember's release. I am sure that I speak for the whole House when I say how delighted we all are for him and his family and friends that he and the two Canadian hostages have been released. It is important, however, to remember that an American hostage, a compatriot, was brutally killed in Baghdad. I would also like to praise the British forces, working alongside forces from other countries, for what has been described as their prominent role in securing the hostages' release.
	We have had a number of debates in the House about the situation in Iraq, and I am sure that that will continue. We also have regular defence debates, in which it is possible for right hon. and hon. Members to raise that issue. I have spoken on Iraq on many occasions, and it is a matter that the Government take very seriously. We also recognise the importance of the views of right hon. and hon. Members.
	As for ministerial statements, we have a practice of issuing written ministerial statements when that is appropriate, and they provide a considerable amount of detail. Ministers also recognise the importance of coming to the House when that is necessary, and it is something that they do on a regular basis. I looked at the statistics recently, and on average a Minister makes a statement to the House pretty much every other sitting day, so it is a regular occurrence.
	As for press speculation, one of the interesting aspects of our great media is that if they speculate often enough about what will be in a ministerial announcement or a Budget statement, some of that speculation will be right. It necessarily follows that if enough ideas are spread around, the media will get it right once or twice. I am delighted that the hon. Member for Somerton and Frome (Mr. Heath) believes what he reads in the newspapers about their sources of information. There is a touching naivety about the Liberal Democrats, which we all rather appreciate.
	I have made clear the position on the Mental Health Bill. Of course, had the Government not responded to the debate and the various representations received, we would have been criticised for that. Again, I do not expect consistency from the Liberal Democrats—and I am not getting it.
	As far as Government vacancies are concerned, I would have thought that the Liberal Democrats, and the Conservatives, who also raised the issue, would have praised the Government for the efficient way in which we are managing the business of the country. Obviously, not having a full complement of Ministers means that our productivity is higher.

David Taylor: There are growing concerns about the potential impact of the Legislative and Regulatory Reform Bill as presently drafted. Some call it the "Abolition of Parliament Bill". I do not accept that; I accept the Government's reassurances that they will not attempt to push through controversial legislation using this framework. Can the Leader of the House tell us what future opportunity Members will have to debate and table amendments to it so that although Governments have the right to amend, repeal and replace legislation they must always do so with the scrutiny of and accountability to the people in Parliament?

Geoff Hoon: There was a vigorous debate in Committee about the Bill, and the Minister responsible made certain undertakings to the Committee that the Government would in due course bring forward amendments. Those amendments could be tabled on Report, which obviously will take place on the Floor of the House soon.

Nicholas Winterton: May I remind the Leader of the House that one of his duties is to this House, in which capacity he should be non-party political, and seek to represent the interests of the House? Will he therefore use business questions less for party political propaganda and more in the interests of this House? And with regard to his role as Chairman of the Modernisation Committee, will he assure me that he and the Government—because he controls that Committee, unlike any other Select Committee of this House—will give proper and due consideration to the establishment of a business Committee for the House, which will be representative of Back Benchers, who can then take decisions on how this House deals with business and the amount of debate, as opposed to legislation, that takes place?

Geoff Hoon: I assure the hon. Gentleman that I was not in any way descending into what he described as party political propaganda. I was simply stating the facts. If Opposition Members do not like those facts, I can only apologise. Having chaired several meetings of the Modernisation Committee, I find the idea that I control it slightly astonishing, not least because the hon. Gentleman's regular contributions make it absolutely clear that I simply do not. Sometimes I cannot stop him talking. I find far-fetched the idea that I can guarantee the result. I would welcome advice from anyone as to how I would control him; unfortunately, I see that the Opposition Chief Whip has left the Chamber—[Interruption.] I see that there is a higher power present—and I am sure that the hon. Gentleman's wife, the hon. Member for Congleton (Ann Winterton), will give me some good advice on that subject in the future.
	As for the idea of a business Committee, it has always been the tradition of the House that such matters are resolved through the usual channels. I see no reason to depart from that in principle at this stage.

Ann Coffey: Will my right hon. Friend make time for a debate on the interpretation by chief officers and councils of the code of practice for the conduct of local elections? I am very concerned about the possibility that guidelines issued by the chief executive of Stockport council, Mr. John Schultz, will prevent me, and other hon. Members, from fulfilling our responsibilities as Members of Parliament on behalf of our constituents during the pre-election period.
	My right hon. Friend may have read in the Stockport Express, and indeed in The Daily Telegraph, that that same council is planning to turn off the lights in the town, and about my utter condemnation of that policy. My hon. Friend the Member for Denton and Reddish (Andrew Gwynne) has also had cause to criticise his Liberal Democrat council. I hope that my right hon. Friend shares my view that Members of Parliament have the protection of the House in carrying out their duties here and in their constituencies, and will agree to allow time for a debate so that the message can be conveyed loud and clear to those unelected local government officers who seek—without the authority of the House—to stop us.

Geoff Hoon: I note that you are paying careful attention, Mr. Deputy Speaker, as you always do when this matter is raised. It is obviously of great importance to Members in all parts of the House that they should be free to carry out their duties as Members of Parliament. That is a fundamental principle of this House and of this Parliament. If there are varying interpretations of the code of practice, that is not acceptable to Members.
	I had the privilege of visiting my hon. Friend's constituency in a ministerial capacity, and I know what an assiduous and hard-working Member of Parliament she is. It is important for her and other right hon. and hon. Members to be able to carry out their duties in the House free of the constraints about which she has rightly complained.

Ann Winterton: rose—

Hon. Members: How do you do it?

Ann Winterton: I do it easily.
	May I support the request from my right hon. Friend the Member for Maidenhead (Mrs. May) for a full day's debate on the national health service, in Government time, for additional reasons? Three consultations are taking place concurrently, which is extremely confusing for our constituents. The first is on the reconfiguration of primary care trusts, the second is on "Making it Better, Making it Real"—which threatens vital and popular services at Macclesfield district general hospital—and the third is on the future health care project. Those are important matters of which the public should be aware, and one of the consultations—on "Making it Better, Making it Real"—has been deeply flawed.

Geoff Hoon: As I have made clear to the House on a number of occasions, the Government welcome any opportunity to set out our excellent record on the national health service. I am sure that if the hon. Lady is concerned about the consultations, she can make appropriate representations to my right hon. Friend the Secretary of State for Health. If she is concerned about the funding of the health service, she will have an opportunity to raise it during the debate on the Budget, as I made clear earlier.

Roberta Blackman-Woods: Can my right hon. Friend arrange a debate on the impact of European Union directive 2002/95, which concerns hazardous substances, on the organ pipe-building industry? It is certainly the view of the industry, including the famous organ builders Harrison and Harrison in my constituency, that the directive will prevent them from manufacturing organ pipes, and will lead to job losses. The House will have heard the response from my right hon. Friend the Minister for Industry and the Regions to the hon. Member for Mid-Worcestershire (Peter Luff) during Trade and Industry questions. If it is indeed the case that the factory can apply for an exemption so that it can continue its traditional craft, could that please be clarified in the debate that is so urgently needed?

Geoff Hoon: My hon. Friend has made an important point on behalf of her constituency, and on behalf of those who work in the industry. I know that my right hon. Friend the Secretary of State for Trade and Industry takes the matter very seriously. The Government will pursue it, and I am sure that as it has been raised today, my right hon. Friend will write to my hon. Friend directly.

Bernard Jenkin: May I draw the attention of the Leader of the House to a letter sent from a GP's surgery in my constituency by Dr. Philip Woodcock to the Secretary of State for Health? Dr. Woodcock complained that the local primary care trust was forbidding local practices to carry out certain procedures as part of an exercise in money saving and cuts that was taking place in the Colchester PCT area. Does that not underline the fact that the refusal of the Chancellor of the Exchequer to raise the issue of the health service in the Budget is one of the most inept political ploys that he has ever attempted?

Geoff Hoon: I have made it clear that we shall have three days of debate, following the debate that we had for most of yesterday, when Members can raise any issues they like. If the hon. Gentleman catches Mr. Deputy Speaker's eye, he will be able to raise his point about the letter. As he does so, however, he really must explain whether he is actually saying that health service organisations should not have regard to ensuring that the money that the taxpayer provides for health—in record amounts nowadays—should not be managed properly and used efficiently. That is the issue. Are the Opposition really saying, when they are admitting that they would cut the money going into public services—and therefore cut the money going into the health service—that we should not use that money effectively on behalf of the people whom the health service treats?

Tom Harris: There are suspicions—possibly justified, possibly not—that the reason why some political parties do not want to identify individuals who have given them loans is that some of those individuals may be foreign. Is it not appropriate now for us to have a full debate on the Floor of the House so that we can discuss the future of party political funding, and so that the shadow Attorney-General can come to the House and expand on his comment earlier in the week that the Conservative party should stop hiding the names of individual benefactors?

Geoff Hoon: I am grateful to my hon. Friend for raising an issue that was raised earlier by the right hon. Member for Maidenhead (Mrs. May). Obviously the Government have recognised the need for transparency. We have changed the rules relating to political donations, and we have acknowledged that a further change is necessary. But if we are to have a proper debate in the country on this question, clearly all parties must come clean about the sources of their finance. Unless and until the Conservative party is prepared to do that, we shall not be able to have a proper and thorough debate.

Andrew MacKay: May I remind the Leader of the House that his primary responsibility is to protect the reputation of the House? As there is genuine public disquiet about the funding of the national health service, how can he justify the fact that the Secretary of State for Health will not take part in the Budget debate, and the fact that the Chancellor of the Exchequer did not mention the NHS once yesterday, for the first time in any of his 10 Budget statements?

Geoff Hoon: I repeat that there will be every opportunity for right hon. and hon. Members to discuss the funding of the health service during the debates that have been made available, and I am sure that they will do so. As for the specific question raised by the right hon. Gentleman, the Government have dealt with it by allocating so much time to discussion of these important subjects.
	As my right hon. Friend the Chancellor has made clear, an astonishing amount of money is going into the national health service. That money must be managed, and it must be managed effectively. A very small number of health service organisations are responsible for deficits. I am surprised at the implication of what is being said by the Conservative party, which is that the Government should not have regard to ensuring that that money—taxpayers' money—is spent properly, efficiently and effectively on behalf of the people of this country.

Vera Baird: I was very sorry that the shadow Leader of the House could not bring herself to give a sincere welcome to the initiatives that the Chancellor took yesterday to provide better training in skills for women. They have been welcomed universally by all except Opposition Members. The situation contrasts very favourably with the total lack of initiatives for women and work when the Conservatives were in government, while from time to time the pay gap worsened. None the less, acknowledging that there is a pay gap, and acknowledging that the report from the women and work commission contains some very good recommendations, may we have a full debate on those recommendations to establish whether we can make progress, and possibly even galvanise Opposition Members into taking a bit of interest in the issue?

Geoff Hoon: I am grateful to my hon. and learned Friend for raising the issue and setting it out in that way, not least because we were told that Conservative Front Benchers were going to abandon Punch and Judy politics—not least the right hon. Member for Maidenhead, who famously described the Conservative party as the nasty party. Yet what we have heard by way of a response to the Budget, including the matters raised by my hon. and learned Friend, is an eight-minute rant from the Leader of the Opposition, and opposition to every proposal.

Richard Younger-Ross: Will the Leader of the House draw the attention of the Secretary of State for Trade and Industry to a BBC programme broadcast last night called "Whistleblower", which exposed illegal and shoddy practices among London estate agents? In some cases an estate agent had offered to sell a property for £100,000 below cost if the buyer would bung that estate agent £10,000. Will the Secretary of State come to the House and make a statement about the conduct and regulation of estate agents?

Geoff Hoon: We have just had Trade and Industry questions, at which the hon. Gentleman could have raised that issue; nevertheless, I recognise that it is one of great concern. I did not see the television programme to which he refers, but I have seen articles in the Evening Standard, for example, pointing out estate agents' apparent and alleged poor behaviour. On this occasion, I choose to give such reports some credibility. Members will need to return to this issue.

Sharon Hodgson: May we have a debate on the Highways Agency's use of article 14 orders to block developments and the jobs that they would bring to areas such as mine, where such jobs are greatly needed if we are ever to achieve 80 per cent. employment? Businesses such as Northern Rock are prevented from expanding by the use of article 14 orders, which are meant to prevent congestion in areas that are overheating and where the roads have been fully expanded. However, that is not the case with the A1 and the A69, which in some places have not even been dualled.

Geoff Hoon: My hon. Friend raises an important issue that is of great concern to my right hon. Friend the Secretary of State for Transport. I will ensure that he writes to her about it.

Tim Loughton: Last night, I was rung by a journalist who told me that the Mental Health Bill will be dropped. We heard details about that this morning on the radio, and at 10.15 am the press were summoned to the Department of Health to be formally informed. Sometime afterwards, a statement appeared in the Library. The Secretary of State for Health really must make a statement to the House explaining where this legislation now stands. We have had a Green Paper, a White Paper, two draft mental health Bills and a pre-legislative Scrutiny Committee. How much money has been spent on this entire exercise, which has now come to nothing? What will the timetable now be for amending the Mental Health Act 1983, and how does the Secretary of State for Health propose urgently to deal with such legislation's conflict with the European convention on human rights? Simply issuing a statement and talking to the press really will not do. The Department must be accountable to the House for this very important legislation, for which we have been waiting for seven years.

Geoff Hoon: The hon. Gentleman has answered his own question, in that my right hon. Friend the Secretary of State for Health has issued a written ministerial statement—quite properly and in accordance with the rules of the House—setting out the Government's thinking. The Government remain committed, as the statement indicates, to introducing legislation to resolve certain mental health issues, and it will be introduced as soon as possible.

David Anderson: The Leader of the House will be aware that, next Tuesday, this country could be hit by the biggest strike since 1926—in fact, the biggest strike ever of women workers. Can he arrange for the Deputy Prime Minister to make a statement to the House on what he, as the regulator of the local government pension scheme, intends to do to resolve this issue? The trade union has proposed positive changes, but the management is refusing to negotiate, even if there are no financial implications.

Geoff Hoon: My hon. Friend has rightly identified that the Government's responsibility in this matter is as the regulator of the pension fund, which means that we are obliged to ensure, on behalf of those who benefit from the fund, that it is properly funded. The issue between the trade union and the employers is one for them to negotiate, and we encourage negotiation rather than resorting to strike action.
	I should emphasise to my hon. Friend the importance of ensuring that this pension fund is properly funded; if it is not, the very people who are contemplating strike action will lose out because their pensions will not be payable at the rates they are expecting. I repeat: I urge all those involved to negotiate instead of resorting to strike action, and I hope that my hon. Friend will join me in that call.

John Bercow: May we please have an urgent debate in Government time on the continuing crisis in Darfur? Given that foot-stamping by the Sudanese Government has effectively vetoed a vital United Nations troop deployment to Darfur, and given that, while the international community dithers and delays, Darfurians are dying in droves every day, is it not now time to decide whether the UN's proclaimed responsibility to protect is a serious attempt to avert genocide, or simply a piece of vacuous moral posturing?

Geoff Hoon: I am very grateful to the hon. Gentleman for raising this important issue, which many Members are concerned about, as are the Government. The Government are the second largest donor to that difficult area of the world, and we take this issue extraordinarily seriously. We have offered not only cash but assistance in kind, in the form of military and other expertise. I urge the hon. Gentleman to continue to raise this issue; he will have a further opportunity to do so next Wednesday, at International Development questions.

Jim Sheridan: Notwithstanding the excellent measures announced in the Budget yesterday to protect vulnerable people from ever-increasing energy costs, and the initiatives announced today by the Minister for Energy, there remains one important question: the alleged link between the rising cost of oil and rising gas prices. May we therefore have an independent inquiry into that alleged link, which many serious commentators in the industry deny exists?

Geoff Hoon: As my hon. Friend knows, the Government are undertaking a major and thorough review of energy. They will look at that link, as well as our prospects of securing alternative forms of energy into the future. The Department of Trade and Industry is examining this issue in detail, and my right hon. Friend the Secretary of State for Trade and Industry and my hon. Friend the Minister for Energy are giving it careful consideration. My hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) will doubtless want to make representations to them.

Iris Robinson: Will the Leader of the House find time to discuss the serious matter of this Government's and the Department of Education's duplicity in their treatment of the state-controlled and Catholic-maintained sectors in Northern Ireland? They are closing those categories of schools due to falling rolls, but they are allowing, through a charitable trust—which happens to be funded by the Department of Education—the building of new, integrated schools. That will have catastrophic effect on the sectors to which I have referred, which are already struggling in terms of pupil numbers.

Geoff Hoon: If the implication of what the hon. Lady is saying is that we should not encourage the integration of schooling in Northern Ireland, I would be very disappointed.

Iris Robinson: No.

Geoff Hoon: I am sure that the hon. Lady did not mean to give that impression. It is obviously very important that we promote integrated schooling that allows young people in Northern Ireland to grow and develop with knowledge of, and understanding of, all the communities represented in that part of the world. However, I will certainly ensure that my right hon. Friend the Secretary of State for Northern Ireland writes to her on this issue.

Andrew Gwynne: I echo the very real concerns expressed earlier by my hon. Friend the Member for Stockport (Ann Coffey). The ruling Liberal Democrat group on Stockport council is peddling irresponsible scare stories about savage cuts to Greater Manchester police, despite a 45 per cent. increase in the police precept over three years and record numbers of police officers, community support officers and support staff. Will my right hon. Friend therefore find time for a full debate on policing in Greater Manchester, so that the record can be put straight?

Geoff Hoon: My hon. Friend has done that extremely well through his observation. He is an assiduous campaigner in Stockport, and I am sure that the Stockport newspaper referred to earlier will cover his contribution and that of my hon. Friend the Member for Stockport (Ann Coffey) thoroughly.

Pete Wishart: Is the Leader of the House entirely satisfied that we will have sufficient time to debate the remaining stages of the Legislative and Regulatory Reform Bill, given growing concerns about its provisions? What has he got to say to the people of Scotland, who are increasingly concerned that a future, hostile Government could use some of its provisions to amend the Scotland Act 1998 to the detriment of the Scottish Parliament?

Geoff Hoon: I have already made it clear that there will be an opportunity for Members to discuss that Bill. Its remaining stages will be taken on the Floor of the House, where amendments can be tabled, debated and decided on.

Charles Walker: Could we have an urgent debate on peerages? Unlike many of my colleagues, I do not really care if people want to buy the right to sit in the House of Lords, but I do care if people can buy the right to legislate in the House of Lords. Perhaps we could have a second tier of junior peerages, so that people can call themselves Lord Snooks but are not allowed to pass laws. Perhaps the parties could have 10 each of those peerages and auction them on eBay to ensure that we get best value.

Geoff Hoon: I rather thought that that was how the hereditary peerage worked anyway. I know that the Conservatives secretly regret the passing of the hereditary peerage: they have certainly never given us much assistance in that and for many years they have relied on the hereditary peers to frustrate the will of the elected Labour Government. The hon. Gentleman makes his point in an entertaining way, but if we were to have such a debate, is he guaranteeing that his Front-Bench colleagues would reveal whether any Conservative peers have been elevated to that rank as a result of making an undisclosed loan to the Conservative party?

Edward Garnier: Will the Leader of the House provide Government time for an early debate on the role of the Civil Aviation Authority in the east midlands? He will know that on 4 February there was an incident at Nottingham East Midlands airport in Leicestershire that the CAA has simply dismissed, despite the fact that information about the incident was provided by a member of the air traffic control staff at the airport. Is he also aware that the draft master plan produced by NEMA, as it is called, will double the number of night flights and quadruple the amount of freight flown over my constituency between now and 2010? Will he also invite the CAA urgently to look into the recent incident at Great Glen in my constituency last Saturday, when a large lump of ice fell from an aeroplane on to the car of one of my constituents?

Geoff Hoon: I know from regular use that Nottingham East Midlands airport is an excellent airport and the expansion that we have seen in recent years has provided a tremendous boost to trade and industry in the east midlands. The hon. and learned Member has raised some serious questions and I know that my right hon. Friend the Secretary of State for Transport will want to deal with them.

Michael Penning: May I back the calls for a debate on the future of the health service and, in particular, the cuts that will be made? My constituents face a £30 million cut in health care, leading to the closure of all the acute facilities at our hospital, including a brand spanking new stroke unit. My constituents want nothing more than a level playing field, so perhaps the debate could be used to explain why the Prime Minister's constituency, Sedgefield, gets £1,210 per head for health care, but my constituents get £960. That is a shortfall of £250 per head and could have kept some of those departments open. We want a level playing field, not rhetoric from the Leader of the House.

Geoff Hoon: Again, I have relayed to the House on several previous occasions the fact that the deficits in the health service are limited to a relatively small number of organisations. Some 50 per cent. of the deficits were incurred by just over 6 per cent. of health service bodies. I do not wish to minimise the difficulties that some health service organisations have had in managing their budgets, but I hope that the hon. Gentleman will join me in recognising that it is important that budgets are managed so that our constituents can have confidence that the money that they pay in taxes to provide excellent health care is used properly. On the specific issue of how those issues are calculated, he knows full well that the formula for funding depends on an assessment of the degree of deprivation and health problems in particular areas. It is right that those calculations should be made.

Bob Spink: At the last general election, all three main party leaders said that it was now necessary to review legislation to reduce the time at which the abortion of babies is allowed. When can we expect a review by the House, or is that another key issue on which the Prime Minister says one thing and does another?

Geoff Hoon: I know that the Chairman of the Health Committee is concerned to try to find a way to establish an appropriate consideration, not so much of the time limit itself but of the underlying science affecting it. That would be a sensible way forward and, if the hon. Gentleman wishes to do so, he could write to the Chairman and urge him to conduct an inquiry by the Select Committee.

Peter Bone: Last night, I was contacted by a constituent whose father had had a heart attack in June 2005 and needed a bypass. On four occasions that gentleman has been admitted to hospital and four times his operation has been cancelled for non-clinical reasons. I urge the Leader of the House to have a debate in Government time on the health service so that the Secretary of State for Health has to reply to the debate.

Geoff Hoon: Everyone takes individual cases seriously, and it is important that they are resolved satisfactorily. However, it is equally important—as I am sure the hon. Gentleman recognises—that we should not treat individual examples of particular problems as somehow symptomatic of alleged widespread difficulties in the health service. The experience of right hon. and hon. Members across the country is of a remarkable improvement in the operation of the health service, and a significant reduction in waiting times. We need to continue and expand those reductions, but most Members of Parliament are delighted with the improvements that the Government have brought about in the health service.

Brooks Newmark: Braintree community hospital was due to be completed last December. Unfortunately, not a single brick has been laid. When I asked the head of my strategic health authority what was going on, he explained that no business plan had been delivered because of the deficits in my primary care trust. May we have a debate on the funding crisis in our PCTs?

Geoff Hoon: I have made it absolutely clear repeatedly—I am sorry to have to say it again—that if the hon. Gentleman wishes to do so, he may raise the issue in the debate this afternoon, should he catch your eye, Mr. Deputy Speaker. If he cannot do so this afternoon, he could do so on Monday or Tuesday. There is every opportunity for the issues to be debated. I know that the hon. Gentleman is an extremely successful businessman and I would be astonished if he were suggesting that his businesses should run large deficits without being attended to by his accountants. His accountants would get the sack if they persisted in running deficits without attending to the underlying difficulties.

Philip Davies: West Yorkshire police have recently announced that they are having to close the public help desk at several police stations, including two in my constituency at Shipley and Bingley. I am sure that the Leader of the House understands how important public access to local police stations is in reassuring people about the issue of crime. Will he show how seriously he takes the issue by agreeing to an urgent debate about public access to police stations?

Geoff Hoon: It is of course vital that the public should have access to and confidence in their local police force, which is why the Government have spent so much extra money on providing more police officers and more community support officers in every part of the country, ensuring that the police are accessible to the local community in a way that has never been possible before.

William McCrea: The Leader of the House assured us today that he is anxious to have fairness and understanding across the community in Northern Ireland. Will he therefore find time to debate the deep offence caused by the Prime Minister in his foreign policy speech in London on 21 March, in which he referred only to the Protestant community? Does the Leader of the House not realise that the Protestant community has suffered the onslaught of IRA terrorism for the past 30 years and therefore resents being used as a political football in an international game?

Geoff Hoon: I am absolutely confident that my right hon. Friend the Prime Minister did not intend any offence to any community in Northern Ireland. I know from my experience in the European Parliament, where Members from Northern Ireland are vigorous in promoting the cause of their communities, that it can sometimes unconsciously cause difficulties if references are not properly made to all of the communities in Northern Ireland. I assure the hon. Gentleman that that would be my right hon. Friend's clear intention.

Territorial Army Rebalancing

Adam Ingram: With permission, Mr. Deputy Speaker, I would like to make a statement about the Territorial Army, but before I do so I shall mention the situation regarding Mr. Kember. As a Defence Minister, I am pleased to confirm the involvement of British forces in the multinational rescue operation of Norman Kember. The rescue was the result of weeks of careful work and preparation and I pay sincere tribute to the professionalism of the British armed forces. To ensure that we do not compromise future operations, it is not appropriate to go into any detail about the operation or to confirm the troops involved. However, I stress how proud I am of the achievement of those involved in the rescue, which I know will be shared throughout the House.
	For many months, the TA has been consulted widely about the changes we should make better to integrate it into future Army structures, which, I remind the House, we announced in November 2004. As a result, much of what I have to say will be of no surprise to TA units. Their views, at all levels, have been sought and their input has helped to define the review outcomes. I am grateful for their comprehensive engagement in that process.I would also like to inform the House that I have written today to all Members whose constituency TA units are affected by the rebalancing, with details of the changes to those units. I am also placing details of all the changes in the Library.
	The size of the Territorial Army will not be changed. It will remain at an authorised strength of 42,000, including a university officer training corps of 3,500. Within that unaltered total, the changes we introduce will reflect the modern-day role of the TA as an integral part of our defence posture.
	The great change in the TA, which came about as a result of the reforms of the late 1990s, was to move it away from its cold war role. In its place, a mobilisation culture was introduced, such that members of the TA would expect in future to be mobilised and deployed on a range of operations in support of our defence policy overseas, rather than be held in reserve for defence against an attack on western Europe. Since then, the reserves generally, and the Territorial Army in particular, have made a major contribution to operations overseas—for example, we have deployed about 12,000 in Iraq since 2003. Once again, they have in a real sense earned their spurs. I pay tribute to their ability to adapt, in just a few years, to the changing and very demanding circumstances of the new century, and I publicly acknowledge their appreciable skills and courage.
	The operational experience gained from extensive use of the TA has allowed us to apply lessons learned in respect of its most effective employment. First, we are assigning to the TA its proper role in the more demanding contingencies for which it might be required to deploy. Each TA unit will be given a clear role to augment the regular order of battle for large-scale operations—those on a scale similar to the campaigns in the Gulf in 1990 and in Iraq in 2003. That is the role for which the TA will train.
	Secondly, although we will structure the TA for larger-scale operations, we will continue to support individual members of the TA who want to volunteer for tours on operations of a lesser scale. Many soldiers indicate that they are very keen to deploy on such operations, and the experience they gain is invaluable. At the same time, we need to regulate the use of the TA so that unnecessary strains are not put on individual volunteers, their families or employers, so we will aim to limit the use of reserves on operations to one year in every five, unless individuals volunteer for more. Although that will be our aim, the legal position is that they can be called out once in every three years.
	Thirdly, in designing our TA units, we will take account of the realities of TA service. There will always be some volunteers who are still going through their basic training, and others who for good reasons are not available for mobilisation when a particular crisis occurs. We have, therefore, made allowance in our unit structures for both a training and a mobilisation margin, so that TA units are more robustly structured to deliver the trained manpower needed for operations.
	Fourthly, we will strengthen the affiliation of TA units to the regular units with which they are likely to operate, thus improving mutual understanding and operational capability. Closer affiliation to regular units for training purposes will also increase joint TA and regular training, thereby delivering more enjoyable, relevant and challenging training to the Territorial Army.
	Finally, we will strengthen the support we give TA units, with about 240 permanent staff recruited to provide administration, welfare, training and employer support.
	The organisational changes of TA rebalancing will include strengthening the Royal Engineer element of the TA, the establishment of which will increase by about 1,600, as well as increases to the TA yeomanry, or Royal Armoured Corps, and the Army Air Corps. The following new TA units will be formed: an Army Air Corps regiment to support the Apache attack helicopter regiments in the Regular Army, to be based in Bury St Edmunds; and a new Royal Engineer regiment—72 Engineer Regiment Volunteers—will have its headquarters in Gateshead, with a re-roled Parachute Engineer squadron in Wakefield, and will take under command squadrons in Newcastle and Sheffield. In addition, five new engineer squadrons will be raised in Kinloss, Cumbernauld, Failsworth, Northampton and Northern Ireland, as well as a new TA military intelligence battalion, which will have five companies based across England and Scotland. A military provost staff company will be formed in Colchester, which will be a new capability for the TA and will provide deployable expertise to assist and advise in the custody of detainees. A complete new transport regiment will be raised in the south-west, based in Plymouth, with squadrons in Truro, Dorchester and Poole.
	As we have already announced, the TA infantry will be reduced by about 900 posts, and reorganised to form 14 TA infantry battalions as an integral part of the future infantry structure. We will now revert to the practice of naming TA battalions after the regular regiments of which they will form a part, rather than after the regions in which they are based. As fewer volunteers will be required as signallers, logisticians and combat medical staff, there will also be reductions in a number of other arms and services.
	The changes I have outlined will happen not overnight, but over a number of years. For many volunteers, little will change at all. Those whose units are likely to change will, of course, be given every opportunity to discuss, understand and make an informed decision on their own future. The vast majority will, I am sure, continue to be active members of the TA.
	Territorial Army volunteers have shown over the past century that they are extremely adaptable to the requirements of national security. The changes I have announced today will ensure that the TA continues to be a force for good in dealing with the challenges of the next century, as an integral part of our land forces. I commend them to the House.

Gerald Howarth: First, I thank the Minister for providing me with an advance copy of the statement. I join him in congratulating our armed forces on the magnificent job that it appears they have yet again carried out in Iraq, in the release of Mr. Norman Kember, which will be welcomed not only on both sides of the House but throughout the land and, I hope, throughout the whole free world. It follows the magnificent operation undertaken in September 2005 when British forces were instrumental in releasing two of our armed forces who were being held by the Iraqi police in Basra. As the Minister said, such operations illustrate the extraordinary professionalism of Her Majesty's armed forces, in which the whole House can take enormous pride.
	I associate the Opposition with the tributes paid to the Territorial Army by the Minister. Members of the TA do an outstanding job and it is genuinely debatable whether the Government would have been able to carry out their operations in Iraq without the support given by members of the TA—not only in the specialist skills which they bring, but in their making up the shortfall in the Regular Army caused by the reduction in numbers under the Government.
	As the Minister said, since we became involved in Iraq about 12,580 TA soldiers have been mobilised to plug the gaps. That number includes two extremely distinguished members of the reserve forces, my hon. and gallant Friends the Members for Westbury (Dr. Murrison) and for New Forest, West (Mr. Swayne), who have certainly played their part in the support of their country.
	I also think that we should pay tribute to the employers, without whose support and co-operation in releasing their employees for deployment the TA could not operate. In particular, we should acknowledge the special contribution of small businesses, which often have to make great sacrifices when members of their staff are deployed.
	In a written answer of the 22 February, the Minister stated that, at 1 December 2005, the total strength of the TA was 37,430, against an establishment of 41,610. Yet that figure was misleading, as it included 5,750 members of the Officer Training Corps. The truth is that the actual number of TA personnel stands at around 31,680, making the actual shortfall in the establishment, leaving out the OTC, about 6,500. Furthermore, according to a recent report in The Herald—a newspaper with which the Minister will be more than familiar—it is alleged that only a third of the TA is ready for operations.
	More than 13,500 men and women have left the TA since the invasion of Iraq in 2003—over 6,000 have left in the past year alone. That translates to a rate of about 600 people a month leaving the TA. Previously, about 150 people a month left. The TA's manning levels are now at some of the lowest figures since it was formed in 1906, yet the rate of deployments is higher than at any time in recent years.
	Across our armed forces, both regular and reserve personnel are being asked to do more with less. The Minister has presented the restructuring today as a means of increasing the TA's deployability and, of course, we welcome any increase in the utility of those forces. We particularly welcome the return to affiliating TA units to their regular counterparts—something that is more than symbolic, as it will have practical operational consequences. We also welcome the creation of an Army Air Corps reserve regiment to support the Apache attack helicopter. The Army has been particularly adept in using air reserves.
	Although we also welcome some of the additional units proposed by the Government, we cannot understand the proposal to reduce some of the specialist units, such as medical staff. In the annual report for last year, the Ministry of Defence stated that there were areas of "critical shortage", and the latest available figures indicate that, against an establishment of 6,880, there were only 4,080 medics. Furthermore, we fail to understand why the infantry is to lose 900 TA personnel.
	May I pose a few specific questions to the Minister? First, there is no mention in the statement of the civil contingency reserves. What has the Minister to say about the TA's role in countering terrorism at home and being available to deal with other civil emergencies?
	Secondly, what significance should we attach to the mobilisation of a new combat legal force, something that sounds distinctly menacing, the form of a military provost staff company? Perhaps the Minister could tell us whether part of its role will be to root out the likes of Mr. Phil Shiner and others who seek to undermine the work that is carried out by armed forces. If so, we would welcome that new legal battalion to act in support of our regular and TA forces.
	Thirdly, what can the Minister tell us about the haemorrhaging of TA members that I describe and the need to recruit, particularly given the strain that that places on employers? He mentions the objective that TA personnel should not be called up for further duty within five years. Can he tell us whether he expects to able to live within that or whether he will rely on the three-year legal requirement.
	Fourthly, can he tell us what proposals he has to maintain a TA presence in the Orkney and Shetland islands? People there are keen for that presence to be maintained, so I hope that he can give us something positive on that.
	Although some welcome changes have been announced today, we should be under no illusion that the Government are relying too heavily on the TA as a substitute for an adequate standing army. Today's announcement illustrates that fundamental. Rather than a rebalancing, this looks like a further web of cuts.

Adam Ingram: The hon. Gentleman's reply was like the curate's egg in that he welcomed some parts of the statement, but I appreciate his opening comments in which he echoed some of what I said. Like him, I pay tribute to the employers—small businesses and others—who perhaps take the greatest strain in all this if any of their employees are called up, and they willingly co-operate with us in the main.
	A bit of history would not go amiss. Let us remember that the TA was halved in the 1990s.

Gerald Howarth: The cold war ended.

Adam Ingram: Given the end of the cold war, we considered what the post-cold war structure should be, as part of the strategic defence review. Of course, this further rebalancing will take account of the new Army structures and infantry structures. We are mirroring the restructuring, which involves recognising where the pinch points and the critical shortfalls occur. As the hon. Gentleman will be aware, we are re-roling about 3,000 Regular Army posts to try to make good that problem, and the same applies across the TA. That is why the rebalancing is taking place. It will give those forces greater usability and greater impact, and therefore greater influence over what we seek to do in defence of the national interest.
	The civil contingency reaction force was not mentioned because it will remain unchanged. That role continues.
	The hon. Gentleman asked about harmony, and I said that it was an aim, but a legal requirement is involved. I do not know how that will play out, because it depends on tempo and usage. We will seek, as best we can, to achieve the higher harmony guidelines, because we value our people, but my experience of the TA is that a lot of them want to serve anyway, and they want to do so frequently.
	The hon. Gentleman asked about Orkney and Shetland. No change is planned on Orkney, but we are considering the possibility of closing the very small unit on Shetland. We are talking, from memory, about only 19 TA members, with three support staff. Although it does not quite fit the neat rebalancing, I decided that is appropriate to keep the Shetland unit. Over time, it will be re-roled to match the engineer unit on Orkney. We will deal sensitively with those who are currently in the TA. We have decided to retain the unit. I am conscious of the fact that we recently decided to close Saxa Vord on Shetland. If the unit had closed, it would have meant that there was a bit of the United Kingdom where the military was not flying the Union flag. I did not think that such a decision would be appropriate, given the remoteness of the island.
	The hon. Gentleman asked about retention and recruitment. Of course, retention is clearly an issue. Some of the figures could be occasioned by the fact that, once people have completed their deployments and had their moment of contribution and excitement, some of them will probably leave, perhaps because they are under employment pressure. We need to get a better handle on all that—a better understanding of it—but against a very significant decline in recruitment in the early post-SDR period, it is now increasing. That is encouraging, and we must seek to maintain all that.
	As at 1 January 2006, there were 297 more recruits than in January 2005—a 1 per cent. increase. As at 1 February 2006, there were 323 more recruits than at 1 February 2005—again, a 1 per cent. increase. That looks like an upward trend, but we must maintain that. Again, I make the point that we have consulted extensively on that among the TA, and the rebalancing will give greater focus and an even higher level of commitment, if that is possible, in the way in which the TA conducts itself, because it will have all the new arrangements, with a more coherent structure.
	On medical staff, there is no question that we have issues in relation to them. That is one of the critical points, and the NHS also suffers from it in trying to recruit. Our judgment is to get the numbers to a realistic size, but I mention history again: medical support to the Army was effectively undermined under the last Tory Administration.

Gerald Howarth: Ten years ago.

Adam Ingram: Well, it is 10 years on, and we are recovering very significantly from the legacy that we inherited. We are growing the regular support and the number of the TA medical staff that we can recruit and retain is based on a much more realistic assessment of what the market can bear.

David Taylor: The Minister is right to refer to the professionalism, adaptability, courage and tenacity of the TA, but recruitment and retention is still a key concern and the hon. Member for Aldershot (Mr. Howarth) is right to pay tribute to the tolerance of small businesses, in particular, in that regard. Those who leave the TA refer to three key things. First, they feel that they are not sufficiently valued. That is not true in the House, but it is certainly true elsewhere. Secondly, they do not always get access to the health care that they need when returning from foreign assignments. It is good news that the Minister has announced that they will be vulnerable to that only one year in five. The third problem is that many of them find that they have been sacked while they have been abroad. Is there anything more that he can do, among the welcome list of initiatives that he announced today, to reduce the chances of that happening so that those people are not deterred from serving their country in Iraq and elsewhere, where I understand that they have carried 10 per cent. of the load in the past three years?

Adam Ingram: That is an issue. My hon. Friend is aware of the extensive support mechanisms that we have put in place to assist those in the TA. I am not making any announcements on that today, but I hope that a message comes out of the statement about the way in which we will take things forward and the important element of the additional staff who will be employed to work alongside our own people on welfare and administration and also employers, which will allow them to create a greater awareness of the vitality and importance of the TA. If employers are considering their business continuity needs, they will see that if there was a disaster in their area, the CCRF and the TA could well turn out, alongside the civil authorities. There could well be occasions when their own employees turned out to save the very businesses on which they depend. We can put over strong messages on this issue. Assistance from Members would be greatly appreciated—I know that my hon. Friend provides that—to get the message over about the importance, vitality and necessity of the TA.

Nick Harvey: I welcome the liberation of Norman Kember and his associates and pay tribute to the professionalism and skill of those whose actions led to that. I thank the Minister for his statement, which should be welcomed as a broadly sensible measure to bring about the restructuring of the TA in line with the future Army structure plans. There was an implicit recognition by the Minister, at least of stretch—even if not of overstretch—on the part of the TA. It is right that the House should pay tribute to the work of the TA, particularly in light of the additional burden that it has carried in recent years.
	We have already had exchanges about the recruitment and, in particular, retention difficulties in the TA during the past couple of years, when the duties on them have been much more onerous. Is the Minister confident that it will be possible to preserve the current levels in the TA, as he said today is his intention, or will further over-tasking make the problems even worse? Can the changes that he has talked about be achieved, given the recruitment and retention problems? What action is being taken to tackle the shortfall, which, however one calculates it, must, at the very least, be 4,000 or so?
	It is welcome that the statement says that reserves will be deployed only one year in every five, or more if they volunteer. The Minister reminds us that the legal situation is that they can be called up one year in every three. Will he undertake to make regular reports to the House about the regularity of deployment so that we can monitor that?
	I did not quite follow the Minister's reply to the hon. Member for Aldershot (Mr. Howarth) about medical staff. We all understand that there has been a shortage of medical staff, but the Minister's statement and his reply seemed to suggest that fewer staff would be required in the future. I do not quite understand how that can be.
	Finally, on the military footprint—the geographical spread of the TA units—I noted with interest where the new units will be based. I have to confess that I have struggled fully to assimilate the significance of the tables because they seem to be colour-coded, but were faxed in black and white. In the fullness of time, no doubt we will get a better impression. It is essential that there remains the widest possible military footprint from the TA so that as many parts of the country as possible are supporting and engaged in the work of the armed forces.

Adam Ingram: I thank the hon. Gentleman for his comments. He probably has a faxed copy of the tables, which is why it is black and white. He will have been written to with a colour-coded copy. If he has a colour fax—

Nick Harvey: I have.

Adam Ingram: He has. Obviously in the Ministry of Defence, we are in a cost-cutting mood and we cannot quite match that. If the hon. Gentleman has anything spare in his parliamentary allowance, perhaps he could help. I apologise for what happened. The letter will include a colour-coded copy, which will assist him.
	The core of the key points that the hon. Gentleman raised was about whether we were certain, or satisfied to some degree, that what we announced would be delivered. If we did not restructure or rebalance, we would have a problem, because there would be an incoherence in relation to what we are now demanding in terms of the future infantry structure and Army structure, and the TA would feel somehow second class. Over recent years, it has become obvious that that mood—if it ever existed in parts of our forces—does not exist any more. On my visits, it constantly strikes me, that, very early on in operational theatres, people stop asking others whether they are TA because it is impossible to tell. They are very much an integrated part—and even more so with the rebalancing.
	I gave the improvement in recruitment. We have got to make sure that that is continued. There can be no guarantee on that. We are competing in a very difficult environment, because of high employment and other opportunities, and we will continue to do so. However, there is the fact that we are bringing the TA more into the Regular Army structure and that there will be single command at the top end in relation to how we recruit both for the Regular Army and the TA. Someone who expresses an interest in joining the forces, but may not want to join the regulars would immediately be notified of their opportunities in the TA and vice versa. That co-ordinated approach should help recruitment.
	I was not saying that there was less need for medical staff. I was saying that medical support—the Defence Medical Services—was dramatically cut during the last Tory Administration. We are recovering from that legacy. It takes time to build things up. We are dealing with a massive increase in employment in the NHS, which relates to people going into the medical services. The size of the medical corps in the TA will match the real position. There is no point in having a large establishment that we will not need in a realistic assessment. Increasingly, there is a demand, but increasingly it will be met from the regulars, supplemented by the TA. I am talking about balancing those resources.
	On stretch and overstretch, we have never hidden the fact that some areas are under pressure. We are going through the future Army structure rebalancing and carrying out the TA rebalancing to meet those demands and to ensure that we have better balance.
	I am advised that there are colour copies of the tables in the Vote Office now. If anyone wants to leave and not ask me a question, I will understand.

Several hon. Members: rose—

Madam Deputy Speaker: Order. May I say to those hon. Members who are remaining to put questions to the Minister that if we have brief questions and answers, more of them may well be satisfied?

Kevan Jones: I welcome the statement and especially the announcement on the new Royal Engineer regiment that will be based in Gateshead in the north-east. Members of the Armed Forces Bill Committee who were in Basra two weeks ago were impressed by the professionalism, dedication and enthusiasm of the TA soldiers whom we met. I have met TA soldiers in both Iraq and Afghanistan who were working closely with CIMIC—civil-military co-operation—teams that were doing vital reconstruction work. Has any thought been given to how the array of talents, experience and skills of TA soldiers can be brought to the vital role of reconstruction in Afghanistan and other parts of the world?

Adam Ingram: I am fully conscious of that work and witnessed during the early stages of Telic 1—just after the war fighting had ceased—the role playing by TA personnel in the reopening of Umm Qasr. I also witnessed it in Afghanistan. Water engineers who were being deployed for a different purpose suddenly realised that they had specific expertise, so some remained to work on Department for International Development and non-governmental organisation projects and made a valuable contribution.
	Of course, if people have a specific skill but joined the TA to serve in a different role, we cannot instruct them to use that civilian skill. They are not in the TA to use such skills, although additional benefits can be gained from them. If people serve in an infantry role in a difficult environment, they must attend to their prime duties. We are sensitive to the matter, which, as my hon. Friend highlights, is important.

Keith Simpson: The Minister entitled his short statement "TA Rebalancing". Like my hon. Friend the Member for Aldershot (Mr. Howarth), I welcome it in broad terms. However, we should note that everyone accepts that, under the 1998 strategic defence review, when the Secretary of State was Minister for the Armed Forces, the TA was cut to fund the Regular Army changes—that is a fact. I welcome the rebalancing. Will we see a scale of weapons and equipment in the new units that is equivalent to that of regular units? Given the increasing role of the TA, especially on operations, what opportunities will there be for TA officers to command units on operations?

Adam Ingram: As ever, I bow to the historical wisdom of the hon. Gentleman. I am not going back to the SDR because I am reporting on where we are now, although I appreciate his welcome for the statement—[Interruption.] The hon. Member for Aldershot (Mr. Howarth) is making noises off, but the numbers were halved in the 1990s. There has been a continual reshaping of the TA and we are now trying to get the best coherence.
	The hon. Member for Mid-Norfolk (Mr. Simpson) asks about equipping the TA. If TA units are training alongside regular units, they will clearly need to have compatible equipment. They will use that equipment because they would otherwise be unable to fulfil their role. I do not expect that that will mean that TA units will have all the kit in their own establishments, but they will be able to draw upon it so that there can be effective training.
	The hon. Gentleman asked whether officers will have the capacity to take on command and leadership. Yes, up to a point. The role of commanding officers will be to ensure that they form a unit with all the capabilities. TA officers at captain and major level will have the opportunity to serve in that capacity, as they have done with distinction in recent years.

Julian Brazier: The Government have done quite well over the past few years by ensuring that most deployments by Territorials have been formed sub-units commanded by Territorials. The Minister referred to individuals in his statement, so will he make it clear that the Government will continue to resist the demands of large elements of the Regular Army that the TA becomes a part-time personnel agency from which individuals, rather than formed sub-units, are drawn? I also thank the Minister for our meeting of a few weeks ago. I look forward to the detailed blueprint on the infantry and hope that the structure will encourage the retention, as well as recruitment, of good-quality people and, as such, look as much like a regular battalion as possible.

Adam Ingram: I thank the hon. Gentleman for coming to see me. The meeting was part of my examination of the matter. It is good to get the experience of hon. Members such as him. I thank him for giving me a range of questions that I was able to pose to my officials.
	The whole drive behind what we are doing is to ensure that the TA is integrated in the regular forces. We want to ensure that it is compatible, deliverable and able to achieve its objectives. It would thus be wholly wrong to see it as something that can be dipped in and out of. There will be training for a specific role in major operations because that is the right way of doing things. At any point in time, a third of the TA will be under training and two thirds will be trained—that is the constant cycle that is likely to apply. As I said earlier, it is impossible to differentiate between TA personnel and regulars in the main, whether they are in the infantry or any of the other skilled trades. That reality will grow over the months and years ahead. I do not think that the hon. Gentleman's fear will be realised. I do not think that that is what the Regular Army wants, and I am certain that the TA would not allow itself to be misused in such a way.

Alistair Carmichael: I welcome the news that the Minister brings about the Lerwick unit. He is right to say that it would be unacceptable for the Ministry of Defence not to have any presence in Shetland, and that view is widely held there. However, he will be aware that this is the second time in recent years when question marks have been raised over the future of the Lerwick unit. I think that that stems from the fact that there are specific recruitment challenges because of both the geography and local economic circumstances. If we are to have a strong future for the TA in Lerwick, special measures will need to be taken to entrench the unit's position. Will special consideration be given to the way in which we manage the unit?

Adam Ingram: I thank the hon. Gentleman for his contribution and the representations that he and his local authority have made. I knew the deep feeling in the community and understood the strength of the argument, which, in a sense, was why I did not need a meeting. However, if there had been an overriding defence argument for not proceeding with the unit, I would have done that in the interests of defence.
	The hon. Gentleman is right that the unit is small. I think that it is 19 strong, with two civilian and one uniformed support personnel. It is their role to assist, but the hon. Gentleman has a role to play, too. I know that he will be only too willing to help the unit to grow in strength. I am sure that the decision will be seen as good news in his constituency, so let us play on that and encourage others.
	When I said earlier that there will be re-roling, I should perhaps have better explained that we will examine that to make it more consistent with what is happening in Orkney and the rest of the structure. I can give a "might", rather than a "definite", but I see the benefit of re-roling, although we must take into account what we are recruiting for and why people are recruited. We will deal with all that sensitively.

Tobias Ellwood: Every time the Minister makes a statement in the Chamber about the TA, it is accompanied somewhere, no matter how positive it is, by another salami slice and cut to the overall size of the TA. Today is no exception, because we read on page 3 of the statement that we are to lose 900 posts in the Territorial Army. I fully agree with my hon. Friend the Member for Aldershot (Mr. Howarth) that it is misleading to include members of the Officer Training Corps and the Army Air Corps in the overall figures for the reserve, so will the Minister please correct that? A new police force, or company, is being set up to deal with detainees. What type of detainees will be looked after and for how long will they be kept? Will the new company be going to Guantanamo Bay for preliminary training?

Adam Ingram: I respect the hon. Gentleman, but his last comment was silly. We are dealing with serious matters. I think that this is the first statement that I have made on the Territorial Army in which I have not announced a cut. There are no cuts—the size of the TA remains the same. We are trying to grow numbers. I accept that the TA is under strength, as is the Regular Army. It has ever been thus—certainly, it has been the case for many decades. By rebalancing numbers and trying to integrate the TA with our regular forces we will give people who serve in the TA a new future and improve recruitment. The hon. Gentleman made a point about the setting up of the military provost staff company to deal with detainees. This is an issue, no matter where we are. If we go into a hostile environment we must have a legal construct for the way in which we deal with the individuals whom we apprehend. Clearly, that will be the case in Afghanistan. It is the case in Iraq, as it is in Sierra Leone, the Balkans and elsewhere. There are different memorandums of understanding and host country arrangements, and we need people who are well trained and capable of living within that legal construct and who understand it well. It is an area to which we must attend, hence the reason for the proposal. Those staff will be trained to our standards, which are exceptionally high.

Bob Russell: I endorse the comments about the effectiveness of the Territorial Army, including comments by hon. Members with whom I recently visited Basra.
	I welcome the Minister's statement about establishing a military provost staff company in Colchester, although I trust that that will not be followed by reductions in the signallers there. I welcome, too, the formation of the Army Air Corps regiment at Bury St. Edmunds, which will be welcomed across East Anglia. However, the Minister is rather modest, because if I have read the "Summary of Structural Change by Arm" correctly, an area medical squadron is to be established in my constituency. What numbers will be recruited, both to the military provost staff company and to the area medical squadron?

Adam Ingram: I thank the hon. Gentleman for his welcome. This is an unusual occasion, as I do not think anyone failed to welcome the statement either wholly in part. We must wait and see whether there are any exceptions, but hon. Members realise that there is sense in the proposals. The hon. Gentleman is right that we will establish a new medical squadron—the designation is still to be confirmed—of the 254 Divisional Medical General Support Regiment. I will write to him with more details about that and the new military provost service. According to my figures, there are no cuts or reductions in his area, which does exceptionally well out of the Ministry of Defence, and serves us extremely well in return.

Mark Francois: So as not to disappoint the Minister, may I express concern about further reductions in the TA infantry, not least given the problem of overstretch in the regular infantry of which the Minister is well aware? However, in the interests of balance, I welcome the decision to rename TA infantry battalions according to the regiments in which their regular counterparts serve. On that point, can the Minister assure me on the record that the so-called east of England regiment will be renamed the Royal Anglian Regiment TA? That is what it has been all along, but we would like the cap badge and the name to be fully established.

Adam Ingram: I am sure that the hon. Gentleman will appreciate the fact that I have written to 92 Members, and that point has simply slipped my mind. Nothing has come through the ether to assist me, but I will write to him. He may be able to find the information in the detailed charts that we have provided. [Interruption.] If I may be allowed to respond to all the hon. Gentleman's questions, I might be able to remember the position. I appreciate his partial welcome, and I noted his concern about—[Interruption.] As ever, the one person whom one does not expect not to write properly is the one who passes the note, but my office will write to the hon. Gentleman.
	The infantry reduction is consistent with what we are seeking to achieve in the future Army structure. It is about rebalancing and re-roling. We want to look at critical pinch points for logisticians, engineers, and the intelligence and provost corps so that our future structure can meet future threats. The TA rebalancing is compatible with that exercise. Recognising that recruitment has increased slightly, we must all work to make sure that that increase is maintained in our own areas. That will help everyone, not least the TA, to be more confident about how they can assist the regulars.

Orders of the Day
	 — 
	WAYS AND MEANS

Order read for resuming adjourned debate on Question [22 March].

AMENDMENT OF THE LAW

Motion made, and Question proposed,
	(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
	(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—
	(a) for zero-rating or exempting a supply, acquisition or importation;
	(b) for refunding an amount of tax;
	(c) for any relief, other than a relief that—
	(i) so far as it is applicable to goods, applies to goods of every description, and
	(ii) so far as it is applicable to services, applies to services of every description—[Mr. Gordon Brown.]
	Question again proposed.

Budget Resolutions and Economic Situation

Oliver Letwin: I draw attention to my interests in the register. I draw attention, too, to my interests as a taxpayer and as a user of public services. We have had just under 24 hours to consider the Chancellor's budget. In the calm of reflection, two things are clear—£5.5 billion has been added to the tax bill over three years by the Chancellor and there will be £175 billion of net borrowing over six years. The most telling fact, however, is that the immediate crisis facing Britain is in the health service—a crisis that is captured by the evocative but surprising title of "Brown's cuts in the NHS"—but he remained entirely silent about that. In the past 20 or so hours, that fact has become more and more salient.
	I never wish to impute to an opponent something that they do not sponsor. The Chancellor, however, has sponsored a vast increase in spending on the health service, as is clear in the Budget and is well known to the entire House. Bizarrely, however, the great increase in expenditure on the NHS goes hand in hand with the Chancellor's cuts. For example, 480 people were sacked in the last 24 hours, and 2,000 were sacked in the last week. Every hon. Member will have experience of what is happening on the ground in the NHS.

Edward Balls: rose—

Oliver Letwin: I will give way to the hon. Gentleman, but I will not do so on every occasion on which he seeks to intervene, as I suspect that he would wish to do so approximately once a minute.

Edward Balls: The right hon. Gentleman had a fine and distinguished career in the shadow Treasury, first as shadow Chief Secretary then as shadow Chancellor. He is now head of policy, and today he is probably shadow shadow Chief Secretary. Can he confirm that in all those jobs, it was Conservative policy to achieve falling public spending as a percentage of gross domestic product, and that the proceeds of growth of rule has consistently been applied in the past six years? Can he confirm that that is why the hon. Member for Chipping Barnet (Mrs. Villiers), who is shadow Chief Secretary, confirmed that the Conservative party would not match our commitment to increase state school spending to the level of private school spending? Is that why the hon. Lady is not on the shadow Front Bench today?

Oliver Letwin: I will pass over the absurd question about my hon. Friend the Member for Chipping Barnet (Mrs. Villiers). When I was shadow Chief Secretary I never fulfilled that role in Budget debates, and neither has my hon. Friend the Member for Tatton (Mr. Osborne) fulfilled his role as shadow Chancellor in such debates. However, I will respond—[Interruption.]

Madam Deputy Speaker: Order.

Oliver Letwin: I will respond specifically to the point that the hon. Member for Normanton (Ed Balls) made, quite reasonably, about sharing the proceeds of growth. The Chancellor has relied on his wise advice for many years, so I welcome them both to the fold. We are delighted that they are our comrades in arms, as they believe in sharing the proceeds of growth. Page 259 of the Red Book deals with the proportion of GDP to expenditure in successive years. I was not surprised to learn, given the buffers into which the Chancellor's fiscal policies have run, that he intends that the proportion of spending compared with GDP should fall in successive years. That is called the "sharing the proceeds of growth" thesis. I am delighted that the hon. Gentleman and the Chancellor now agree with us that that is a necessity. Having established that base, we come back to the extremely important question: where is the money going and is it being properly used?

David Wright: Will the right hon. Gentleman give way?

Oliver Letwin: No, I shall make a little progress. The hon. Gentleman will want to hear the next part, before he intervenes.
	The Chancellor said in July 1997:
	"The public rightly wants to see more money put in the NHS."
	Those are fine sentiments, which I echo. The right hon. Gentleman continued:
	"But it wants the money actually to go to patient care."
	That is what he said—
	"actually to go to patient care".
	How has he managed to do what he signalled in the first sentence, and so abundantly failed to do what he signalled in the second sentence? How can one spend £5 billion extra on the NHS in the current year and £6 billion extra in the succeeding year and nevertheless end up with Brown's cuts on the coalface of the NHS? That is a remarkable phenomenon.

Kevan Jones: Can the right hon. Gentleman explain why, whenever the Government have increased expenditure on the NHS, he and his party have opposed it? He asks where the money is going. In Durham, when I was elected in 2001, waiting lists were 18 months to two years. They are now down to four months. That is where the money is going.

Oliver Letwin: I did not expect that the hon. Gentleman would pay much attention to the facts of an election campaign, as opposed to the rhetoric of his own party. I understand that that is often difficult for people to do. Had he read the plans that we put forward before the last election, he would have discovered that our plans exactly matched those of the Chancellor for the national health service. There was not a jot of difference. There were the same numbers in the same years. The hon. Gentleman's proposition, therefore, is entirely false.

David Wright: Will the right hon. Gentleman give way?

Oliver Letwin: No, I shall make progress, as I mentioned.
	There is a pattern that the House needs to examine and understand better. The Government and in particular the Chancellor, who has been the main guiding force of the Government all these years, have had fine aspirations. When the history books come to be written, the problem of the Government will be seen to be the mismatch between the aspirations and the achievements.

Ian Austin: Will the right hon. Gentleman give way?

Oliver Letwin: No, I shall make progress.
	I shall give three or four examples of that mismatch outside the health service, before we return to the question why it is happening. I start with means-testing. I know the Chancellor is no longer very interested in the Prime Minister's views on matters, but the Prime Minister said in 1995:
	"The aim . . . is to remove the stigma of means-testing for ever".
	One does not need to rely on Conservative assertions about what has happened since. One can look at the Turner report, for example, although I know it is not the Chancellor's favourite document. It states that, if present policy is maintained,
	"the percentage of pensioner households subject to means-tested withdrawal of state benefits at some point in retirement would rise steadily and would be above 70 per cent. in 2050".
	That is a pretty remarkable achievement for a Government whose aim was explicitly
	"to remove the stigma of means-testing for ever".

Paul Goodman: The Chancellor said it as well.

Oliver Letwin: As my hon. Friend says from a sedentary position, the Chancellor has no doubt on many occasions echoed the Prime Minister's admirable sentiment, and the Chancellor is the architect of the failure to achieve that result.
	On red tape, again, the Government had admirable ambitions. Labour's 1997 manifesto states unequivocally, and I echo the sentiment entirely—
	"We will cut unnecessary red tape".
	There is obviously an oddity in the definition of "unnecessary". The British Chambers of Commerce has estimated that the cost to business of extra regulations introduced since 1997 stands at just over £50 billion. There have been 15 new regulations per working day since Labour came to office. Again, there is a mismatch between aspirations and outcome.
	On council tax, before Labour was elected the current and temporary Prime Minister said:
	"We will have to exercise restraint and limit local tax increases. . . We cannot allow ourselves to be forced into big council-tax rises".
	Clearly, no Prime Minister can allow himself to be forced into anything, so I assume it is a matter of voluntary decision that, by April, council tax bills in Britain will have increased by 84 per cent. since the right hon. Gentleman made that remark in 1997.

Graham Stuart: Does my right hon. Friend agree with me and my constituents that it is not only the enormous rises in council tax, in direct contradiction to the promises made by the incoming Government, but the election bribe of £200 last year that rubbed salt in the wound, because yesterday we found that the Chancellor has failed to follow that up this year, so pensioners will be paying high council tax with no relief?

Oliver Letwin: My hon. Friend is right. During the election I recall saying to various journalists at various press conferences that there was a difference between the proposals that we made for a permanent reduction in council tax for the pensioners most affected by it, and the Chancellor's proposals, which we said would last only one year. I recall a journalist telling me—I do not know whether accurately—that the Government strenuously denied that that was a one-off move; it merely did not happen to be figured in the Red Book. I remember being told by one journalist that we were naive if we thought that that would be the effect, as he had received personal assurances from somebody—I do not know from whom.
	My hon. Friend is right that one of the cruellest deceptions is that that £200 payment, on which many pensioners came to rely, is not present in the Budget. Did the Chancellor make a statement to the House about why that is so? No, he did not mention it. That is part of the pattern of the Budget.

Jim Cunningham: The right hon. Gentleman makes great play of the council tax rebate and speaks of cruelty to pensioners. May I remind him that the Conservatives increased the winter fuel allowance by only £10, whereas we gave pensioners £200?

Oliver Letwin: The hon. Gentleman will never be able to persuade the British public that the merit of the Government consists in being able to argue that some previous Government were less than perfect. The merits of the Government must be debated and shown to the British public, if they want to earn their trust and re-election.
	Several hon. Members rose—

Oliver Letwin: No, I shall make further progress.
	The Secretary of State for Transport is probably also a temporary occupant of that office. I note that the Chancellor thinks highly of him, and no doubt he will in due course offer us his own Budget, but for the time being he is constrained to dealing with transport, an important role which he fulfils with distinction. He is aware that the Government promised to reduce road congestion below 2000 levels by 2010. [Interruption.] The Chancellor mutters. He is astonished that I should ever attribute to an opponent any nobility or propriety, but I do not believe that politics has to consist of being nasty about people. I tried to be nice about the Chancellor for some years, without the slightest effect on his consciousness. It works rather better with some of his colleagues, who are more inclined to an emollient view of life. The nation will see that in due course.
	The Department for Transport made an admirable plan to reduce congestion below 2000 levels by 2010. It then concluded that that "is not achievable". The CBI estimates that congestion costs are running at about £20 billion a year for the British economy.
	I shall give just one further example, although I have more, if tempted. There is no doubt that the Prime Minister was right in 1999 when he said that everyone should have the chance to see an NHS dentist—another splendid aspiration that everybody on both sides of the House could share. It is unfortunate that six or more years later, 48 per cent. of the population are not registered with an NHS dentist. Every one of my hon. Friends and, if they are honest, Labour Members have had letters from constituents in the past few weeks to ask what will happen to dentistry on 31 March. The fact is that there is a crisis in dentistry.

Ian Austin: rose—

Oliver Letwin: The hon. Gentleman has been so persistent that I shall give way, although this is the last intervention that I shall take for some time.

Ian Austin: Now that the right hon. Gentleman is once again speaking about economic matters for the Opposition from the Front Bench, will he resign the directorships that he holds at Rothschild's, as he was previously forced to do?

Oliver Letwin: Nothing that I have said relates in the remotest degree to Rothschild's, and this brief and pleasant foray into the questions of this nation's finances is perfectly compatible with my declaration in the register.
	We have come to an interesting question, which I imagine that Ministers must puzzle over in their quieter moments—even given their busy ministerial schedules, they must have quieter moments. They must ask themselves, "What is going on? What is getting in the way?" There is a vast wall of money and the cheques are being signed, but why is it not having the anticipated and genuinely desired effects? The nation and the House have not yet considered that question sufficiently. That process is beginning today, and I hope that we will have ample time over the next three or four years to examine that question in detail.
	Let me advance a proposition to explain that bizarre phenomenon. This Government genuinely desire good results, and they want them quickly, which is why they are inclined to do something to achieve them quickly. However, they do not have any deep understanding of the reaction that is likely to set in on the part of society from the action of government. Action meets reaction, and reaction causes the action to be invalid and useless. It is above all the Chancellor who is the architect of that view of life, and he has a basically static view of society. He desires a good result and thinks that society will more or less stay in the same position, except that anything that he does will bring about a determinate effect. Unfortunately, society does not work like that, and I shall give some examples.
	I have already referred to means-testing, and the fact is that the Chancellor is the architect of the vast increase in means-testing. He has increased means-testing because he genuinely wants to reduce poverty—he has a moral passion in that respect, and I pay tribute to it. On both sides of the House, there is a shared desire to see poverty reduced in this country, but the problem is that there has been a reaction. The extension of means-testing has resulted in a disincentive to save, which has been a principal cause, along with the Chancellor's raid on pension funds and many other things, of the destruction of savings in this country. The result of the lack of saving has, alas, been poverty beckoning for many people who should have been rescued from it.
	If that were one isolated example, it would be important and interesting, but it would not be a pattern, but it is not one example, and it is part of a pattern. Let us consider the Secretary of State who rejoices in the title of Deputy Prime Minister. He, too, has an admirable ambition, which is again due to the Chancellor and which is again right, that there should be more homes in this country. We all share the view that we should have more homes in this country, because we need more homes in this country—many of my constituents cannot afford to buy a home. Unfortunately, however, because the desired result had to be achieved immediately without careful thought about reactions, the contractors who built those houses did not use low-carbon building techniques, because there was no incentive to do so. The result is rising carbon emissions, which directly contradicts the efforts that the Chancellor mentioned in his Budget and that the Government say that they are making to reduce carbon emissions.

Tobias Ellwood: Dorset primary care trusts are being made to hand back £11.5 million to the central pot in the Department of Health. That is having an adverse effect on PCTs in Bournemouth and Dorset, which are some of the best run and some of the worst funded in the country, and it is simply because this Government want to address the bigger problem of the national deficit in the NHS.

Oliver Letwin: My hon. Friend is right. We know the problems of the NHS in Dorset, because we represent Dorset constituencies. [Interruption.] My point is that Brown's cuts, which arise from Brown's largesse, can be explained by this pattern—

Madam Deputy Speaker: Order. Front Benchers on both sides seem to be making comments from a sedentary position. If hon. Members want to comment, perhaps they will do so in the usual way.

Oliver Letwin: You are right, Madam Deputy Speaker, as always. However, I have at least managed to provoke the Chancellor into discussing the NHS, which is more than we managed to do yesterday.

Alistair Darling: rose—

Oliver Letwin: I shall give way in a moment. [Interruption.] If the Secretary of State for Transport wants to join in and discuss the NHS, it is good news, but it would be better if the Secretary of State for Health were to come to the House and talk about the NHS.

Madam Deputy Speaker: Order. May we continue the debate in an orderly fashion?

Oliver Letwin: At business questions, we repeatedly asked for the Secretary of State for Health to come to the House, and I hope that the Chancellor and the Secretary of State for Transport will now make representations to her that she should take over a slot in the Budget debate or find another opportunity in order to allow us to debate Brown's cuts with her.

Alistair Darling: If I understand the right hon. Gentleman correctly, for the past five minutes he has been busy making an eloquent case for the Government to spend less, but a moment ago, he told the hon. Member for Bournemouth, East (Mr. Ellwood) that we should spend more on his PCT. When the shadow Chief Secretary, the hon. Member for Chipping Barnet (Mrs. Villiers), was asked yesterday afternoon whether the Conservatives would spend less, she said that it "would certainly mean that". Was she right?

Oliver Letwin: The shadow Chief Secretary was very clear. She said that we believe that over a period we should share the proceeds of growth, which is part of the Chancellor's programme, and that we should find a means of trying to deal with the Chancellor's ballooning borrowing, which is a prerequisite for economic stability.
	In his intervention, the Secretary of State for Transport showed what happens when he amuses himself by talking to the Chancellor instead of listening to what is being said. My point may or may not be right—I cannot claim omnipotence or omniscience; I am a mere fallible human being—but at least it has a logic, and it would be helpful if the Secretary of State were to grasp it. It is not the case that spending a large amount of money achieves the desired result if the methods by which it is done are wrong. This Government have proved that it is possible to spend an enormous amount of money while achieving few of the desired results, if one manages to spend the money badly enough to create reactions from society that destroy one's own efforts, and my hon. Friend the Member for Bournemouth, East (Mr. Ellwood) raised exactly such a case in his admirable intervention.
	How can it be that the wall of money has gone through to the NHS, yet we have Brown's cuts all over the place? The answer is that what is going on in the NHS is a vast effort to deal with Government targets. The people who are getting into the most appalling mess on that issue include the now-to-be-ennobled former chief executive of the NHS, the Secretary of State for Health and, much more importantly, people up and down the country who are wrestling with the problem of trying to run hospitals. Despite the vast wall of money, people who are trying to run hospitals are encountering difficulties, because they must constantly chase targets under a system by which they get directive after directive after directive. They know not whether they are coming or going, so they are demoralised, which results in a health service that is not performing up to the levels which, like us, the Government genuinely and passionately want to see.
	I have taxed the patience of the House enough. [Interruption.]

Madam Deputy Speaker: Order. Will all hon. Members please come to order to let us have a reasonably conducted debate?

Oliver Letwin: I had imagined that this would be a quiet event.

Edward Miliband: Will the right hon. Gentleman give way?

Oliver Letwin: No. I said that hon. Members would welcome the fact that I was about to sum up, and so I shall do so.
	There is only one way out of this conundrum, and that is to have a Government who understand that one has to trust people more and share responsibility with them. We must have a Government who recognise that the people who are working their socks off in our health service, our schools and our police services will not be able to do their job properly if they are constantly controlled by an overwhelming state with its targets, agencies and bureaucracy. The Chancellor can throw money at them left, right and centre, over and again, in Budgets where he does mention the NHS and Budgets where he does not. He can go on trying to pretend that he is going to solve the pensions crisis in Budgets where he mentions Lord Turner and Budgets where he avoids mentioning him—this Budget was one of those—but he will never succeed in achieving the admirable goals that we share across this House if he continues to try to run the country from a desk in Whitehall. It cannot be done and it will not be done. It will produce adverse reactions, as it is today, and the money will be wasted.

Alistair Darling: I am sorry that the shadow Chancellor is not among us, and surprised that the shadow Chief Secretary is not—although I see that she has just entered. There is something of a history in the Conservative party of people going missing when things get awkward. I well remember those happy days in Millbank in 2001, when the right hon. Member for West Dorset (Mr. Letwin), having announced his plan to cut £20 billion of expenditure, then went missing, only to reappear a few days later in a field dressed in a sheet—I think that he was meant to be a Roman emperor. Of course we also remember him in 2005, when he masterminded the plan to cut £35 billion from public expenditure, with similarly disastrous results for the Conservatives. I suspect that one or two of his colleagues wished that he had gone missing in that election as well.
	Having heard the second speech on the Budget from Conservative Front Benchers, I am struck by just how light they have been on Conservative party policy. As the Chancellor said yesterday, if we consider the big issues that face this country and the choices that we have to make to see what is best in our long-term interests, whether on education, transport, fairness, taking children out of poverty or dealing with world poverty, the Conservatives have had absolutely nothing to say.
	The interesting thing about the brief remarks of the right hon. Member for West Dorset—who is after all in charge of making Conservative party policy, which gives Labour Members some comfort—is that he made the case against any Government intervention at all. It was straight out of the book of the Republican party in the United States in the early part of this decade—arguing that Governments cannot make any difference. We believe that whether in education or transport, of course the efforts of individuals make a difference, but it is absolute nonsense to argue that Government cannot make any difference or that it does not matter how much or how little one spends.
	The right hon. Gentleman eloquently demonstrated just how far to the right the Conservative party remains, despite everything that its leader has tried to pretend. It is clear that the dominant view in the Conservative party is now that the state—the Government—can play no part at all, and individuals should be left on their own, instead of the belief, which we hold, that Government can make a difference to the opportunities for people in this country, as we have shown by taking children out of poverty and improving their chances at school—and yes, by putting money into the health service, which has dramatically cut waiting lists. People had to wait 18 months when the Conservatives were in power; by 2008 that will come down to just 18 weeks.

Graham Stuart: The right hon. Gentleman's description of Conservative party policy is a total travesty. What we heard in the excellent exposition by my right hon. Friend the Member for West Dorset (Mr. Letwin) is that the Conservative party is now the party of our national health service. [Laughter.] Labour Members may laugh, but during the 1990s, under the Conservatives, productivity in the health service increased year after year. Since Labour came to power, where has the money gone? Where has it been wasted by this Chancellor? It has gone in falling productivity, as shown on page 22 of the booklet "Productivity in the UK 6", which was produced yesterday.

Alistair Darling: If the hon. Gentleman is talking about whether there are more doctors and nurses in the NHS, yes there are, and that makes a difference. It is why we have been able to reduce waiting lists, and it is one of the reasons why deaths caused by cancer and other diseases have fallen. But the right hon. Member for West Dorset was not making the case for the NHS. He was almost arguing the opposite—that it makes no difference whether one puts money into the NHS. We saw what happened when the Conservatives ran the health service for 18 years: we had long waiting lists. People had to wait for month after month to see a doctor, and for ages to see their GP. It is essential that we support people working in the health service, but we cannot do that if at the same time we deny them the means to do what they are supposed to be doing, which is treating patients.

Oliver Letwin: Does the Secretary of State welcome or regret the fact that 2,000 people have been sacked from the NHS in the past week?

Alistair Darling: No one can be satisfied with a situation whereby NHS trusts get into difficulties. However, the point is that we are spending more money, with £5 billion this year and £6 billion to come next year. The vast majority of trusts are able to cope. Surely the Conservatives are not arguing that if a trust gets into deficit year after year it should simply be bailed out. If some trusts can manage their affairs, others can as well.
	In denying that there is a role for the Government or the state, the right hon. Member for West Dorset gets himself into the difficulties that were illustrated earlier this year, when he talked about reducing poverty and said:
	"the next Conservative government will have to find means of empowering people at the bottom of the heap to have a larger share of an enlarging cake."
	When he was asked,
	"What does 'means' mean—does it mean money?",
	he replied,
	"I don't know yet what the means will be".
	Of course the right hon. Gentleman has to say that, because the Conservatives have bound themselves dogmatically to their third fiscal rule, whereby spending has to fall as a percentage of gross domestic product regardless of the needs of the nation. Regardless of whether we need, as we do, to take children out of poverty and reduce pensioner poverty, regardless of what we need to spend on education or infrastructure, they are bound right from the start, before a single policy has been formulated, to cutting expenditure. First they said that they would do it annually, then over a Parliament, then over a cycle. That means that over the economic cycle, regardless of the needs of the economy, the infrastructure or any public spending, they have to cut their public expenditure.

Edward Balls: In light of that, was my right hon. Friend surprised when yesterday the shadow Chief Secretary confirmed not only that under the Conservatives spending would be lower than under this Government, but that the Conservatives would not match our pledge to raise the level of state school spending over time to that of private schools?

Alistair Darling: I was not, as it happens. I think that the hon. Lady was being disarmingly honest, which is probably why she was taken off the airwaves at 3.27 pm yesterday. She actually said what the Conservatives think. It is worth reminding the House what happened when she was interviewed on Sky television. I am glad that she is here, because she will no doubt take the opportunity to make any further clarification that she thinks necessary. She was asked by Adam Boulton whether "compared to what he"—
	my right hon. Friend the Chancellor— "is planning on spending you would be spending less?"
	She replied, "It would certainly"—or rather, for the sake of completeness, what she actually said was:
	"Um . . . It's . . . It would certainly . . . Yeah, yeah, undoubtedly that could be a possibility."
	It is pretty clear to me that the hon. Lady has eloquently set out precisely what is Conservative party policy. Regardless of what we might need on health, education, or defence—you name it—the Conservatives have got themselves into a position whereby before they set out a single policy, they are stuck with the fact that their third fiscal rule means that they cannot make any rational judgment as to what is required in the future.

Gregory Barker: When the Chancellor made the announcement yesterday about matching education funding in the private sector, had he forgotten that the Prime Minister made the same pledge in 2001, or does he simply not read the Prime Minister's speeches?

Alistair Darling: We have been moving towards that aim. We have increased expenditure on education. [Interruption.] The difference between the Labour and Conservative parties is that we have increased the money for education. We have reduced class sizes and refurbished and replaced hundreds of schools throughout the country. Doubtless the hon. Gentleman remembers the policy on which the Conservatives fought successive elections. They originally tried to encourage people to opt out. Subsequently, they have opposed every item of proposed expenditure in the past seven or eight years.
	My right hon. Friend the Chancellor said yesterday that if we genuinely want to improve education standards and ensure that we have a highly skilled work force, two things are necessary. The first is continuing to make the necessary reforms to drive up standards. Secondly, we must back that up with the money necessary to employ teachers, provide the right IT equipment and so on. The Conservative party opposes that. The fiscal rule that it has adopted means that it cannot spend the money needed on education, or anything else, regardless of the needs of this country.

John Bercow: It would be helpful if the Secretary of State could grasp the obvious and straightforward proposition that expenditure is a necessary but insufficient condition of improvement in the public services. Given that thousands of children from state schools—I attended one, unlike the Secretary of State—are leaving school unable to read, is not it time that the Government stopped heeding the advice on teaching reading that Kimberley, Meek and Miller have proffered for the past 20 years in the psycho-semiotic framework that the shared reading lesson is viewed as an ideological—

Madam Deputy Speaker: Order. The hon. Gentleman is supposed to be making an intervention.

Alistair Darling: I have listened to the hon. Gentleman for several years, and there may be more in common between what he and I think than between what he and Conservative Front Benchers think. I believe that he accepts that reform in the classroom is essential but that one cannot improve education without spending at least some money on it. The right hon. Member for West Dorset opposes the extra money for education.
	If we want to ensure that we have smaller classes, we need more teachers. If we want decent IT equipment in schools, we have to pay for it. When the Conservatives were in power and my children were in primary school, a computer was a rarity. There were computers in private schools but not in state schools. [Interruption.]

Madam Deputy Speaker: Order. Again I ask the House to come to order. Let us have a sensible and mature debate.

Alistair Darling: If we followed the Conservative party's fiscal rule, which means spending £17 billion less this year and £16 billion less next year, that would have a substantial effect on capital and other expenditure. Surely it must be obvious to the right hon. Gentleman privately—I understand his difficulty in blurting it out publicly—that the shadow Chief Secretary's eloquently expressed admission that "Yes, absolutely" there will be less expenditure, causes the Conservatives some problems.

Oliver Letwin: I do not know whether the Secretary of State has had an opportunity in his role as "shadow Chancellor" to examine page 259 of the Red Book. If he has, will he confirm that the Chancellor intends to follow the rule of sharing the proceeds of growth between 2007–08 and 2010–11? Perhaps the Chancellor can show him the page. Will he read out the figures for the percentage of GDP occupied by spending?

Alistair Darling: The Conservative party is committed to cuts over the cycle and substantial reductions in expenditure. That is completely different from the Government's policy. The Conservative party has committed itself, regardless of what is necessary, to cut public expenditure. That works out at £17 billion less this year and £16 billion less thereafter. That would have an effect—and that has been Conservative policy for most of the decade. I believe that it originated in the Witney and West Oxfordshire Gazette in October 2000, when the now leader of the Conservative party was a prospective parliamentary candidate and first set out his belief that spending needed to increase below the economy's growth rate. The Conservative party had the same policy in 2001 and in 2005. That is why it is suffering its current difficulties.
	Conservatives have, more by error than judgment, got themselves into an economic policy that would, through their dogmatic adherence to a rule that makes no economic sense, threaten the stability that we have built up. That is one reason why Conservative policies have no credibility. People will not be able to trust the Conservatives. Indeed, as the shadow Chancellor, who is sadly not with us today, said last September:
	"Too often we have sacrificed long-term credibility for the prospect of winning support from an aggrieved section of the population or the possibility of winning a vote in the House of Commons".
	He continued by saying that the Conservative party's
	"Short-termism has hampered attempts to develop a long-term economic policy."
	He was right.

Peter Bone: The Government have been in power for many years, so they have had a long bash at governing. If spending on education has increased so much, why is a secondary school in my constituency being demolished when there is overcrowding in the other secondary schools and children are left at home with no education?

Alistair Darling: Approximately 20,000 schools have been repaired or replaced. Throughout the country, it is striking that there are so many new schools and schools beings refurbished. That is happening in my constituency and in constituencies all over the country. I suspect that most Conservative Members know that. They also know that class sizes are falling and that there is better IT equipment as well as other facilities that were simply not there eight or nine years ago.
	If the Conservative party sticks to the third fiscal rule, it will mean that in future, it will not be possible for it to match our expenditure. I wonder whether the shadow Chief Secretary was right yesterday when she said that the Conservatives would not accept our proposals to increase expenditure on children who go to state schools so that it begins to match the money for those who go to private schools. Do they accept that?

Oliver Letwin: My hon. Friend the Member for Chipping Barnet (Mrs. Villiers) said no such thing. She was referring to aggregates. We have made it clear that we have no objection to the Chancellor's 1 per cent. increase in spending on Britain's schools.

Alistair Darling: Not only did the shadow Chief Secretary refuse, but the shadow Chancellor refused, when he was pressed on television last night, to commit himself to that amount of expenditure. [Interruption.] Sadly, I do not have the "Newsnight" transcript and I can therefore only go on the impression that the shadow Chancellor gave. [Interruption.]

Madam Deputy Speaker: Order. Again, debate is breaking out throughout the Chamber. Let us debate the Budget resolutions.

Alistair Darling: Perhaps we could clear up the matter. I am happy to give way to the right hon. Gentleman who speaks, at least today, for the Conservatives. Is the Conservative party committed to increasing education spending so that we spend the same per head on children who go to state schools as on those who go to private schools?

Oliver Letwin: I made it clear that we have no objection to the 1 per cent. increase in school spending that the Chancellor included in the Red Book. Will the Secretary of State tell us when it will happen and by what stages, and how much money the Chancellor will spend on that weird and waffly promise, which is a nice idea? Can he tell us anything about how and when it will be funded? We could then make a mature judgment about the proposition. Neither the document nor the Chancellor's speech contain any details about it. I hope that the Secretary of State will acknowledge that simply spending the money is not enough. That is the point that we have been trying to get into his head, and the Chancellor's head—and if they do not get it, the children of this country will suffer.

Alistair Darling: I think the right hon. Gentleman has just said that that was a nice idea—which could be Tory-speak for no. However, my answer to the question is yes, we are committed to increasing capital expenditure up to 2010–11, as was set out by my right hon. Friend yesterday.

David Gauke: I would be grateful to know the time frame the Government have in place to meet their aspiration for expenditure on schools in the state sector to equal that in the private sector. How has that time frame changed since the Prime Minister made his original announcement on the subject in 2001?

Alistair Darling: As I said earlier, we have increased education spending and we will continue to do so. I would never wish to misquote any Conservative Member, but when the hon. Member for Chipping Barnet was asked whether the Conservatives were going to match us on expenditure, she said: "That's not the answer." That seems to raise significant doubt whether the Conservatives have any intention—let alone the ability—to match us on that. If they were prepared to match our goal of increasing expenditure on education so that we spend the same on children in state schools as on children in private schools, they should say so, rather than attempting to dance on the head of a pin and avoid the question.

Several hon. Members: rose—

Alistair Darling: I shall give way to the right hon. Member for West Dorset, then I must make some progress.

Oliver Letwin: Let me repeat these simple questions. The Secretary of State wants us to match something. Right. When? How much? And how has it changed since the Prime Minister made the commitment?

Alistair Darling: The right hon. Gentleman could start by answering that he will meet our commitment to increase capital expenditure by 2010, as set out by the Chancellor yesterday—[Interruption.] Well, he does not want to answer that question. The Conservatives are finding every which way to avoid answering it. The reason why they have to do that is that they are stuck with this rule, which means that they are committed to a reduction in expenditure. That means that they could not meet the goal that we have set ourselves.

Julie Kirkbride: Will the Secretary of State give way?

Alistair Darling: No, I want to make some progress, but I will certainly give way later.
	With education, transport or any other measure, it is important to ensure that we are in a position to make real choices, and that is what the Budget allows us to do. As the Chancellor said yesterday, there are choices to be made between tax reductions and investing money to improve services and infrastructure in the long term. That is why we reject the idea that we should be tied to a dogmatic rule that would prevent us from making that choice.
	On education, I agree with the proposition advanced by some Conservative Members that this is not just about money. It is also about implementing the necessary reform. However, there is a difference between us, in that when we see schools that are in difficulties or failing, we are prepared to do something about it, both in terms of teaching skills and of making the necessary investment.

Graham Stuart: The right hon. Gentleman says that when the Government see schools that are in difficulties or failing, they take action. As the Member for Beverley and Holderness, I have next door to me the authority of Hull, which boasts two members of the Cabinet among its Members of Parliament. In Hull, however, the Government are not turning the schools round. They are letting down the pupils. What is the right hon. Gentleman going to do about that?

Alistair Darling: When a school is in difficulties or failing its children, it is up to the local authority, supported by the resources that it gets from us, to do something about it. The Conservatives say that they are in favour of the reforms, yet they would deny the education system the means to carry them out—[Interruption.] Because if they are committed, as they are, to the rule that prevents them from spending the necessary money, regardless of the consequences, they will be unable to will the means of achieving those changes. The Conservatives are tied to a dogmatic rule that prevents them not only from investing in infrastructure but from improving fairness and opportunity in education.

John Bercow: The problem is that the right hon. Gentleman's rhetoric is simply not matched by the reality. Given that children in young offenders institutions receive on average only eight hours education per week, and that the Government say that they want to help the most disadvantaged people in our society, will the Secretary of State explain why no reference whatever was made to that subject either in yesterday's Budget or in the 167 clauses, 18 schedules and 228 pages of the Education and Inspections Bill? What is going on?

Alistair Darling: rose—

Madam Deputy Speaker: Order. We are discussing the Budget resolutions, not what is in the Education and Inspections Bill.

Alistair Darling: The Budget, as the hon. Member for Buckingham (John Bercow) well knows, is primarily concerned with the allocation of resources and the decisions as to how they are spent. He is right to say that we need to improve the quality of training. That issue is being addressed, and the situation is steadily being improved. However, we need money to do that, just as we need money to help families with young children.
	The Conservatives' attitude to tax credit and the pension credit is quite revealing. When they go on about means testing, it is clear that what they are actually against is the policy that we have pursued for a number of years, in which we have deliberately channelled more money into the hands of families with young children, and of pensioners on low or modest incomes. That is one of the reasons why we have been able to reduce child poverty and pensioner poverty—something that simply did not happen when the Conservatives were in office. When I see the shadow Chancellor expressing increasing scepticism towards these tax credits, it becomes quite obvious what the Conservatives are about. They have always been hostile to the introduction of tax credits, yet I believe that those credits have played a substantial role in reducing poverty and helping families with young children.
	I turn now to the measures on the environment that were introduced in the Budget. They, too, reveal the gap between what the Conservatives say they are in favour of and what they actually do. The climate change levy has been very important, because it encourages energy efficiency in business. Through the levy, we have been able to reduce carbon emissions by about 28 million tonnes, which is a substantial way of meeting our Kyoto obligations. However, the Conservatives have made it very clear that, despite all their rhetoric, they continue to oppose the climate change levy. The Chancellor announced yesterday that, from next year, the levy will increase in line with inflation. It will be interesting to see what the Conservatives actually do, despite the talk of the Leader of the Opposition and other Conservative Members, when asked to choose between doing something that really does reduce carbon emissions and simply talking about that policy.

Gregory Barker: Does the Secretary of State agree that the climate change levy is simply a tax on energy, and not a tax on carbon?

Alistair Darling: No, I do not, because it does reduce carbon emissions. There was a time when I thought that there was consensus in the Chamber that we should reduce carbon emissions, but there is no point in simply talking about doing it. We need to produce the means of reducing them, and without doubt, the climate change levy has done that. That is why the Conservatives ought to support it, rather than opposing it. It is all very well to talk about cycling to work and putting solar panels on houses. Yes, all those things help, but if we want to make a substantial reduction in carbon emissions, we have to will the means to do that.

Gregory Barker: rose—

Alistair Darling: I will give way to the hon. Gentleman one more time. Perhaps he will tell us whether he will support the proposal to increase the climate change levy in line with inflation from next year.

Gregory Barker: The climate change levy could be a much more effective tool if the Government were prepared to look at the facts. Does the Minister agree that it is not effective? If it were, carbon dioxide emissions would not have risen in five of the past seven years. Will he further confirm that we shall not meet the 2010 target that was set out in the 2001 and 2005 Labour manifestos—

Madam Deputy Speaker: Order. These interventions are getting far too lengthy. There are people who actually want to contribute to the debate as well.

Alistair Darling: We will meet our Kyoto obligations. We have introduced a number of measures, and next week my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will set out the further steps that we propose to take. One of them is to introduce an obligation to increase the use of biofuels, which will result in the equivalent of taking about 1 million cars off the roads every year. I hope that the Conservatives will support that as well. The measures that we announced yesterday to change the road tax paid will also send a clear signal to people that they should think long and hard about what they do to reduce the environmental damage caused not just by transport but by other means as well.

Julie Kirkbride: The right hon. Gentleman is trying to parade his green credentials, but the top rate of vehicle excise duty that the Chancellor announced yesterday applies to only 1 per cent of cars. Is that not rather timid as a green proposal?

Alistair Darling: The hon. Lady seems to be calling for even greater taxes on gas-guzzling cars. It is obviously important to have for road tax a reasonable balance between the top and bottom end of the range. There has been substantial change in that nearly half the cars will now pay a frozen or a reduced rate. That applies to the cars that are more environmentally friendly, but there will be higher rates for those that cause more damage.
	Of course, that is not the only thing that we are doing. We have the road transport fuel obligation and, largely at our instigation, aviation emissions have been included in the European trading scheme. We are taking a number of measures.

Chris Grayling: rose—

Alistair Darling: I shall give way to the hon. Gentleman who speaks on transport for the Conservative party.

Chris Grayling: I am grateful to the Secretary of State for giving way. When the announcement was made yesterday, with a great fanfare from the Chancellor, of a new zero rate for vehicle excise duty, was the Secretary of State aware that it appears that only two cars are eligible for that zero rate, and that they are not currently on sale in the UK?

Alistair Darling: As the Chancellor said yesterday, there are a small number of cars in the zero-rated band, but the whole point of introducing the banding is to encourage the industry to become more efficient. As I said to the hon. Gentleman earlier this week, it is high time he started thinking about long-term solutions. If he has better solutions, then he should come up with them. The changes that we have made send a very clear signal to people, and they are important when we consider them with the other changes that we have introduced. When we vote on the climate change levy at some point, I hope that we will see the Conservative party change its mind. It is all very well to talk about these things, but if it is not actually willing to vote for the measures that reduce carbon emissions, all its talk adds up to very little.

Graham Stuart: Friends of the Earth said yesterday that it felt that the Budget had failed to provide a major contribution to tackling emissions in the long term. Does the right hon. Gentleman agree?

Alistair Darling: Over my years as Transport Secretary, nothing that Friends of the Earth has said to me has surprised me. Many environmental groups widely welcomed what the Chancellor said yesterday. I believe that that, and other measures, send a very clear signal to motorists.

Stewart Hosie: Yesterday's announcement on carbon capture and the memorandum of understanding with the Norwegian Government were very welcome. Do the Government have any estimate of the time scale for large-scale carbon capture and for carbon to be pumped into the North sea, starting with the emissions from power stations?

Alistair Darling: We want to get on with that as quickly as possible, and we will publish proposals. As the hon. Gentleman knows, quite a lot of work has been done—for example, at Peterhead power station—to see how carbon can be captured and stored under the North sea. We want to try to bring forward practical measures that will encourage that. I cannot give him a precise time scale, but everybody wants to press on as soon as we possibly can.
	Nobody can be in any doubt that the problem of greenhouse gases is growing. The difference between us and previous Governments is that we are doing something about it by meeting our Kyoto obligations and making sure that we meet other obligations as well. To do that means that we have to support measures such as the climate change levy.
	It is clear from the contribution of the right hon. Member for West Dorset, and from the little that was said by the Leader of the Opposition yesterday, that the Conservative party hopes that if it says very little, people will not notice what it is up to. The right hon. Member for West Dorset has gone further today, and confirmed what we always thought about where the Conservatives instincts lie. They are trying to argue that the Government have a very limited role, and cannot make a difference to the lives of people in this country. They have tied themselves to a fiscal rule that is absolute nonsense in economic terms.
	In contrast, my right hon. Friend the Chancellor yesterday set out a clear direction for this country for the future. In particular, he showed how we can, from a position of strength, invest in education, continue to put money into other public services and make a real difference to the future prospects of this country. This country has been transformed over the past few years. We have built a position of strength that would have been undreamt of 10 years ago when the Conservative party was in power. For those reasons this Budget should be commended, and we should vote for it next Tuesday evening.

Alistair Carmichael: I cannot recall a time in politics—certainly in my lifetime—when the Government have given us so much to talk about, but the official Opposition have had so little to say about it. The performance of the right hon. Member for Witney (Mr. Cameron) yesterday and of the right hon. Member for West Dorset (Mr. Letwin) today has been an affront to the House. They had the opportunity to hold the Government to account; they had the opportunity to—

Graham Stuart: Why is the hon. Gentleman attacking us?

Alistair Carmichael: Because you have said absolutely nothing and you are not fulfilling—

Madam Deputy Speaker: Order. I do not think that the hon. Gentleman meant to refer to the occupant of the Chair.

Alistair Carmichael: Nothing could be further from my mind, Madam Deputy Speaker. The official Opposition have not done their job and they are letting down the people who vote for them and who send them here.
	Managing expectations is one of the most important aspects of politics, and it is something that the Secretary of State for Transport normally does exceptionally well. When I saw that the first full day of debate on the Budget was to be about transport, my expectations were raised. I really thought that we would hear a great deal in the Budget about transport, because many transport issues tick many of the boxes that seem to be important to the Chancellor. Transport can be a tool of economic development, it can be a tool for environmental improvement and it can be a tool for social inclusion. Those are all things that the Chancellor says motivate him and underpin his policies to date. However, there was virtually nothing about transport in yesterday's speech.
	Last week, the Secretary of State gave us a tremendous speech about the future of the rail network. We were told about a new generation of high-speed trains; we were told about the possibility of double- decker trains; and we were told that we were going to have transport of which we could be proud. He also offered some sort of vision of a 20 to 30-year strategy. For an issue such as transport, that is exactly the right approach. We need to have more long-term thinking and more long-term strategic thinking. The absence of such long-term strategic thinking has caused many of the difficulties with the transport infrastructure that we have today.
	Why did the Chancellor not follow that up yesterday? Why was there nothing about the railways in the Budget? We were told that it was going to be a green Budget, and there is an obvious link between transport and the reduction of CO 2 emissions. I welcome the new bandings for vehicle excise duty. They have the potential to make significant changes and to encourage the use of more environmentally friendly vehicles and to discourage the use of the more dangerous and damaging ones. However, the manner in which the bandings have been introduced has been timid in the extreme. It is mere tokenism.
	As my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell) pointed out yesterday, the extra cost of vehicle excise duty for gas guzzlers will be roughly equivalent to the cost of filling half a tank of petrol for one of them. There is therefore no real disincentive for the so-called Chelsea tractors. Those who can afford such vehicles will not be put off from buying or using them by an increase in vehicle excise duty of that scale. However, the use of larger 4x4 vehicles is important for many people in constituencies such as mine and in other rural and remote communities. Such people—and farmers, in particular—operate businesses that work on very tight margins. The extra cost will make a difference to them, but no protection will be given to them.

Mark Lazarowicz: The right hon. and learned Member for North-East Fife (Sir Menzies Campbell) seemed to give the impression in his comments in the House that the increase in vehicle excise duty was not high enough. The hon. Gentleman, however, seems to be suggesting that it is too high. Can the Liberal Democrats be clear about what their policy is?

Alistair Carmichael: I hope that the hon. Gentleman will listen a wee bit more carefully from now on. I was saying that some meaningful protection was needed for those who will be hit hardest—[Interruption.] I do not know whether a Conservative Member wishes to intervene. [Interruption.]

Madam Deputy Speaker: Order. Does the hon. Member for Bexhill and Battle (Gregory Barker) wish to make a comment?

Gregory Barker: What protection does the hon. Gentleman suggest? Can he explain?

Alistair Carmichael: The hon. Gentleman has finally got to his feet and had the courtesy to ask the question properly. I can tell him that there is an opportunity, within the regulatory framework operated by the European Union, for derogations from vehicle excise duty for remote and peripheral communities. Spain, Portugal and Greece have provided that for many years. We urged his party to do that when it was in government for many years, but it always refused to do so. We have always been told that it could not be done, but we found out recently that France has started doing it. That is the sort of protection that can be given.

Gregory Barker: So, farmers who have large 4x4s in the hon. Gentleman's constituency will get a subsidy, but farmers in my constituency, only 50 miles from London, will be penalised like the Chelsea tractors. Do I understand him rightly?

Alistair Carmichael: I shall not dwell on this point—the hon. Gentleman asked for one example. He is well aware that it is possible to put in place protection for people for whom it will make a difference. One means of doing that is on the basis of geography, as I explained. It is also possible that rebates can be offered through VAT or the tax system; that is not beyond the wit of man. My point—and he was one of those who was chuntering behind me earlier, complaining that I was not being hard enough on the Government—is that the Government have made no attempt to give us any of those protections. I find it difficult to understand the insistence that one size will fit all and be appropriate for all parts of the country.

Mark Lazarowicz: rose—

Alistair Carmichael: I want to make some progress.
	In the long term, we should be dealing not with vehicle excise or fuel duty, but with a proper system of national road pricing. The Secretary of State has made encouraging noises about that in the past but, again, we heard nothing about it yesterday. It is not as though we are short of transport projects needing support. In Greater Manchester, the Government still fail to demonstrate adequate commitment to the Metrolink expansion. Light rail schemes in Leeds, Liverpool and Portsmouth have all been cancelled. The Government guidelines on light rail procurement, which we were promised last December, have still not been published.
	When it comes to new roads, however, it seems that money is no object. The Secretary of State will be aware that the National Audit Office is currently investigating how the Government's new road building programme seems to be spiralling out of control. The costs have gone from £3.5 billion to £5 billion. Where is the prudence there?
	Money does not seem to be so readily available for road maintenance. Tomorrow, the annual local authority road maintenance report will be published. I will not pre-empt that, but it is fair to anticipate that it will be bleak. Much of England's road network is potholed and crumbling, which is dangerous for cyclists, motorcyclists, pedestrians and motorists. Filling in small potholes is not as sexy as building new roads—it does not provide the same opportunities to cut ribbons at openings—but it is necessary and important.
	On the question of bus transport, I want to give a warm and genuine welcome to the proposals for free bus travel for pensioners, which will be introduced as a nationwide scheme in 2008. I commend the Secretary of State and the Chancellor for having at last caught up with their colleagues in Scotland and Wales in the implementation of a national scheme.

Mark Lazarowicz: It is, of course, a national scheme for England, as it is a national scheme for Scotland. That has the effect that my constituents, should they wish to visit the hon. Gentleman's constituency, can do so free of charge, but they cannot visit free of charge constituencies in Newcastle or elsewhere south of the border. Does he agree that perhaps we should consider a UK-wide scheme, or at least a mainland-wide scheme, as the next logical development from the welcome England-wide scheme?

Alistair Carmichael: That is an interesting idea, and surely not beyond the wit of man. A pensioner is a pensioner, whether he is in Scotland, England, Wales or Northern Ireland. I hope that some of the disputes about crossing boundaries that we have seen between different local authorities with the concessionary scheme being rolled out in England will not appear at a macro-level. That would be a missed opportunity.
	While we will consider carefully the funding of the scheme to be rolled out by 2008, we must have more immediate regard to the situation facing local authorities that are trying to implement the scheme announced last year. That is forcing many local authorities into crisis as the 31 March deadline approaches. In Watford, for example, the Government provided funding of £300,000, but the eventual cost was no less than £830,000. In Bath and North-East Somerset, the shortfall is in the region of £200,000. Community transport schemes are suffering. Again, many people in remote and rural areas, where there is not an "ordinary" bus service, depend on such crucial schemes. They are not getting that sort of provision as part of the scheme, and I have heard of places where those schemes are being cut to allow councils to meet their commitments to the concessionary scheme.
	York has struggled because it received some £855,000 from the Government rather than the £1,086,000 that the implementation of the scheme will cost. That pattern seems to be repeated throughout the country. In many local authority areas, councillors have taken the initiative and have been able to make significant progress in providing good, often multi-modal, schemes, which are popular and workable on a local basis. Surely it is not right that those schemes should be sacrificed on the altar of the one that they are being forced to introduce.
	An awful lot of opportunities have been missed. The Budget could have delivered a great deal more for transport. The bottom line is that as an instrument of economic generation, environmental change and social inclusion, transport could deliver an awful lot more for the Government, if only they would take it seriously.

Keith Vaz: It is always a pleasure to follow the hon. Member for Orkney and Shetland (Mr. Carmichael). He made his points very forcefully, but in a very moderate way. He also ensured that his party's policies in relation to the Budget were presented to us. As he reminded us, that was in contrast to the speech of the right hon. Member for West Dorset (Mr. Letwin), who has now left the Chamber. He came in, delivered his speech and left—in the absence of the shadow Chancellor and the shadow Chief Secretary, although I was delighted to observe that the shadow Chief Secretary joined the debate halfway through the proceedings.

Gregory Barker: Surely the absence of the shadow Chancellor is not remarkable. The absence that is extraordinary is that on the Labour Benches. The hon. Gentleman is the single, solitary Labour Back Bencher who is present. Oh! Another one has just returned.

Madam Deputy Speaker: Order. I do not think that we need references to anyone who is or is not in the Chamber. We need references to the debate, which is on the Budget resolutions.

Keith Vaz: The fact is that every other Labour Member agrees on the success of the Budget, and I am clearly speaking on behalf of all of them—which is a great and powerful position to be in.
	Listening to the right hon. Member for West Dorset took me back 30 years to when I first saw him speak, in a university debate. His speech today was almost identical to the speeches that he used to give at the Cambridge Union: very funny, made without a script, with the right hon. Gentleman making it all up as he went along—but with no substance. That is exactly what we heard today. It was basically an undergraduate speech, of a type for which the right hon. Gentleman became so famous when he was a student.
	In contrast, my right hon. Friend the Secretary of State for Transport gave an excellent speech, setting out very clearly why the Budget would be such a success. When I returned to my office yesterday after the Budget speech, I was inundated with calls from constituents and others who were delighted with the support that the Chancellor is giving to ordinary working families, and with the success of the Budget and the 10 years of delivery of sustained growth to our country.
	I have been in the House for 19 years. I came in with my right hon. Friends the Paymaster General and the Secretary of State for Transport. I have forgotten who was Chancellor of the Exchequer when I was first elected, but I do remember that every time a Conservative Chancellor stood up at the Dispatch Box to deliver a Budget, it was at a time of crisis. For 10 years we have had economic stability and growth, and that is a credit to the stewardship of the economy by my right hon. Friend the Chancellor—and, if I may say so, by my right hon. Friend the Paymaster General, who has been at the Treasury for as long as we have had a Labour Government.

Graham Stuart: It is a beautiful picture that the hon. Gentleman paints, and I am sure that we all enjoy the pastel colours in which he paints it, but will he concede that the stability and growth started long before the present Chancellor came to office? It started in 1992, since when we have experienced a period of continuous growth. Does the hon. Gentleman accept that the stability was created by the reforms of the last Conservative Government, and that this Government inherited the strongest economy in Europe?

Keith Vaz: No, I do not accept that at all. All that I can remember—and, I am sure, all that the hon. Gentleman can remember from that time, during which he was outside the House—is crisis upon crisis, with Conservative Chancellors coming to the Dispatch Box to try and deal with one or another of them. Whether it was the exchange rate mechanism or some other issue, they were dealing with a crisis. What we have had is stability and growth. What we have had, in the words of the Chancellor, is cultural stability. People expect from this Government the ability to deliver Budgets that will help working people in this country, and that is exactly what we were given yesterday.

Graham Stuart: Perhaps, as the hon. Gentleman's memory is failing him, he will look at the inflation figures for 1997, when the current Chancellor came to office. The inflation rate then was 1.8 per cent., compared with 2.1 per cent. in 2005. Real growth in gross domestic product in 1997 was 3.2 per cent., compared with 1.8 per cent. today. Perhaps the hon. Gentleman will reflect on that and realise that the inheritance, not anything that the present Government have done, has made the difference.

Keith Vaz: Merely saying persistently that the economy was inherited does not justify the hon. Gentleman's proposition. I know that I will be 50 this year, but my memory is not failing me. I know what a crisis is, and that is what we had. I also know what stability is: the lowest level of inflation, the lowest interest rates, the lowest unemployment and the longest sustained period of growth in our country. I think that that is a huge credit to the Chancellor.
	Of course, Oppositions have a duty to oppose what Governments do; that is the nature of opposition. I was an Opposition Member, along with my right hon. Friends the Secretary of State for Transport and the Paymaster General, for 10 years before our party became the Government, and of course one of our duties was to scrutinise. However, when the economy is going well and sustaining and benefiting our constituents, political parties have a duty to say so and to congratulate those who have made it a success. Indeed, the hon. Member for Beverley and Holderness (Mr. Stuart), has benefited from the economy's strength. I am certain that if the economy were not a success, the Opposition would have offered today a much more severe critique of this Government's efforts, instead of the platitudes and nonsense that we heard from the right hon. Member for West Dorset. Therefore, I welcome this Budget and the success that we have enjoyed in the past 10 years.
	I come now to three developments that we heard about for the first time yesterday, the first of which is the additional resources that will be given to education. The overall education budget has increased in the past 10 years, which is only right. It is important that we have given so much money to education and that the economy is strong, so that we can generate the resources to enable our schools to provide our children with the best education that they have ever had. Of particular importance was the decision to give the extra £440 million directly to head teachers. Members can doubtless cite past examples of secondary and primary heads raising with them their concerns about a particular expenditure item, or a staff issue that needed to be resolved. Under this Chancellor, instead of having to ask the local authority for money, heads have been able to use the special budget given to them to deal with urgent and emergency issues. The direct payment to secondary and primary heads gives them their own budget to spend on such matters, which is most welcome.
	Like other Members, I write constantly to local education authorities asking for support for our schools. In the city of Leicester, we have a Liberal Democrat-Conservative coalition and, strangely, although they are unable to get along in Westminster, they get along extremely well in Leicester. Whenever I wanted to deal with a particular issue raised by a school in my constituency, I used to have to write directly to that coalition, and thus the paper chase began. Now, there is a budget that allows head teachers to interface directly with their stakeholders and to spend money on their schools. That is of enormous benefit to schools, head teachers and children.

David Gauke: I presume that the hon. Gentleman supports the Education and Inspections Bill. In general, does he welcome the move to diminish the role of LEAs and to give greater power to schools, so that they do not have to deal with local government bureaucracies?

Keith Vaz: The hon. Gentleman tempts me to discuss a Bill that is not the subject of this debate—and I know, Madam Deputy Speaker, that you would admonish me if I went down that path. I voted for that Bill because it is in the best interests of our pupils and of education, but passing legislation is not enough; we must also give schools the money to implement these policies, which is exactly what the Chancellor has done.
	The second specific expenditure item in the Budget—which I fully support—on which I want to touch is the money being given to prepare our children and young people for the 2012 Olympics. If we are to host the Olympics, it is absolutely vital that we have world-class athletes and that our young people are able to win medals. We cannot start indulging in these activities one or two years before the event. I know that we had a Labour Government for only three years before the millennium; nevertheless, we started our preparations for it far too late. We have six years in which to prepare our young people for the Olympic games, and we should all welcome the £600 million that has been allocated to allow us to train world-class athletes. There is a feeling in the east midlands, and Leicester in particular, that it is very much a London affair. By having the mini-Olympics all over the country—we certainly wish to ensure that we have them in Leicester—we will be able to train our young people early to compete with the best in the world. Starting six years ahead of time is right, so I welcome what the Government propose for the Olympics.
	I also welcome the small but significant amount of money that will be provided to enable a memorial to be set up to those who died in the London bombings on 7 July last year. It is easy to forget and move on, but it is important that we understand the kind of society and country in which we live. Allocating funds for a memorial is not a mainstream issue for the Treasury—although of course money is—but it sends a powerful message that we stand united in the face of terrorism and that we will remember the innocent people who died, of all faiths and no faith, on that day. It is essential that we as a country recognise that and I hope that the money will be well spent. I hope that we will make a better job of it than we did the Diana memorial, which keeps flooding and which nobody can visit because people keep falling over. What a terrible memorial to a great public figure. I hope that the new memorial will be properly designed and executed so that we can remember those people properly.

Simon Burns: The hon. Gentleman has just told us all the things that he welcomes in the Budget. Given the situation of the NHS in Leicester, does he welcome the fact that the Chancellor did not mention the NHS yesterday?

Keith Vaz: My right hon. Friend the Chancellor spoke for one hour and two minutes, and that was a very, very long speech—as we all know. I do not think that we would have wanted my right hon. Friend to speak for any longer than that, so I quite understand it if he did not mention every single aspect of policy that the Treasury has been involved in over the past few years. He does not need to mention the NHS because he has given so much money to the health service in Leicester. From 1997 to 2006, the amount of money going to the health service in Leicester increased by 97 per cent. Waiting lists have gone down. However, I wait to hear from my right hon. Friend the Secretary of State for Health whether she will give the go-ahead to the pathway project, so that the three hospitals in Leicester that have been told that they can have £765 million can go ahead—just like Barts hospital, which has already received permission. However, that is not an announcement to be made by the Chancellor. As the hon. Gentleman knows as a former Health Minister and spokesman, it is the Secretary of State for Health who makes such announcements.

Simon Burns: I appreciate that the hon. Gentleman understands that the Chancellor did not have enough time to discuss health in his Budget, but does he not think that his constituents would have been interested in how the money that will be made available to the health service will deal with the deficits in Leicester?

Keith Vaz: No, because my right hon. Friend the Secretary of State for Health is also a Member of Parliament for Leicester. We know where to go and whom to ask if we have any problems with the health service. I assure him that I shall meet my right hon. Friend shortly to ask her what is happening about the pathway project. I know that the money has been allocated and that the architects have spent £60 million on the hospital, so we want to know when work will start. Having my right hon. Friend there is very important because she will be able to give us the answers. We will expect those hospitals to be built, because that is the promise that was made. It is an issue not for my right hon. Friend the Chancellor, but for my right hon. Friend the Secretary of State for Health, and I will certainly raise it with her.

Peter Bone: The hon. Gentleman and I share the same strategic health authority; it is the worst funded in the country, which is why we have problems in the health service in the east midlands. Would it not have been useful if the Chancellor had done something to even out funding?

Keith Vaz: No, because my right hon. Friend has done a huge amount for our health service, which we welcome, so the issue that the hon. Gentleman raises is not for my right hon. Friend. The money has been allocated and it now has to be spent. I am happy about the amount we received in Leicester, but I want the three hospitals to be modernised. That is the promise that was made and we shall hold everyone to it.
	In his intervention from the Back Benches, the hon. Member for West Chelmsford (Mr. Burns), who has now resumed his Front-Bench duties, said that I supported everything in the Budget. I do, but two important elements were missing and I hope that my right hon. Friend the Paymaster General will deal with them in her response.
	The first missing element was specific support for the textile industry. Thirty years ago, 140,000 people worked in the textile industry in Leicester; today, the number is 28,000. The hon. Member for Wellingborough (Mr. Bone), whose constituency is in the Northampton area, knows that textiles also affect his constituency. I am worried about the industry—about the high level of imports to the European Union and the EU's failure to act properly to stop the dumping of goods. I want specific measures and help for the textile and footwear industries in Leicester, which are important not just for Leicester but for the whole country. If we invest in them, it benefits our whole economy. Before the war, one in every five white shirts in Europe was manufactured in Leicester. We had a huge textile and footwear industry, but it is disappearing. I ask the Treasury to look at that industry before the next Budget, to make sure that specific help can be given.
	The second omission from the Budget speech would have taken up only an extra minute—unlike the health service. It is the Treasury's current assessment of our readiness to join the euro. In his Budget last year, the Chancellor said that he was not authorising a new assessment, but it is important that the Treasury keeps the five economic tests under review. I am fully signed up to the need for us to pass specific tests to join the euro. I understand why the Chancellor has said that it must be done, but I am concerned that we are not keeping the tests under review. In previous Budgets, my right hon. Friend has talked about the need for an assessment, so I hope that in the winding-up speech we will find out what has happened to the current assessment. We may not have met the five economic tests, but we need to be kept informed.
	My final point is about the Lisbon agenda, whose sixth anniversary we celebrate this year, and our role as a competitive economy in ensuring that the rest of Europe reacts to the Kok report, commissioned by the European Commission last year, and to the decisions being made this very day in the spring European Council. My right hon. Friend the Paymaster General is a frequent visitor to ECOFIN, so she knows what it is like to deal with our European colleagues and how difficult it is to move countries along. The Lisbon scorecard is extremely important, because Lisbon was the first European summit to benchmark European economic success. We asked why, over the past decade, America was able to create 10 million jobs, while in Europe we could create only 1 million. It was due to the nature of our economies.
	As my right hon. Friend knows, two reports have been issued this week. One was from the BRUEGEL group—the Brussels European and Global Economic Laboratory—and said that we were doing extremely badly and were way down the list in respect of the Lisbon scorecard. The second assessment, by the Centre for European Reform, was that we were at the top of the Lisbon scorecard, one of only three European Union countries to have met all three of Lisbon's employment targets.
	It is all very well having the best economy in Europe, but we also need—I say this in all friendliness to my right hon. Friends—to ensure that we export some of that economic success to the rest of the European Union. That needs leadership from the United Kingdom on such issues and an acceptance that we must strive to achieve the benchmarks. We are leaders in Europe in economic reform and in the competitiveness of our economy. All that I ask is that we give emphasis and focus to those successes in the year that comes.
	I have only praise for the Budget. I send a big thank you from my constituents to the Chancellor and his Treasury team for giving us the cultural stability that has been lacking in Britain for so many years.

Nicholas Soames: The hon. Member for Leicester, East (Keith Vaz) is a fluent and capable speaker, but the collective memory of the House knows that that there is something wrong with his memory. To describe the period that Nigel Lawson was Chancellor as being a background of solid crisis is to show that the hon. Gentleman wasted the first few years that he was a Member. I remember very well the time that he was talking about. Indeed, the time of the Lawson reforms was the beginning of the settling of the economy's strength, which has given the extraordinary inheritance that the Chancellor benefited from when the Labour Government came to power. I imagine that, otherwise, his constituents will be much gratified by his speech and look forward to him exerting his authority to bring the mini-Olympics to Leicester, in which we look forward to seeing him perform in white shorts.
	Hearing the Secretary of State for Transport speak is, on many occasions, like a near-death experience, and today was no exception. Even by his undemanding standards, it was an absolute corker of a speech. Given the huge transport issues that effect this country—many hon. Members face serious infrastructure problems in our constituencies—it was a very mere and disappointing speech indeed.
	I congratulate the Chancellor on his 10th Budget—a record achieved only by one other Chancellor, Sir Nicholas Vansittart. I do not know what the Chancellor has got to swank about—this is the 21st Budget that I have sat through in the House—but achieving his 10th Budget is a notable milestone. I am prepared to congratulate him, as long as he is prepared to remember that in his time—it has not been a wholly unsuccessful time—he has been able to build on the golden inheritance that he inherited from my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke).
	I congratulate the Chancellor, as I have done every year since he has been Chancellor, on his decision to grant independence to the Bank of England. This time, I applaud very much the steps that the Government have taken, although belatedly, to assign more independence to the Office for National Statistics. I hope that that will enable us to bring greater integrity and accuracy to our statistics, which are so important for the assessment and forming of Government policy.
	The Budget settles for the record the fact that the Chancellor is indeed a leading exponent of the old-fashioned tax-and-spend school. My right hon. Friend the Leader of the Opposition, in his admirable and energetic response yesterday, was certainly right: the Chancellor has indeed raised billions, he has spent billions and he has very little idea of where the money has gone or how effectively hard-working people's tax funds have been spent and to what ends.
	Listening to the Chancellor, he rather reminded me of Christopher Columbus in that when he set off he did not know where he was going, when he got there he did not know where he was, when he came back he did not know where he had been, and he did it all on borrowed money. Listening to his rather manic presentation, one was very conscious of the fact that, as my right hon. Friend the Member for West Dorset (Mr. Letwin) pointed out, it is not necessarily how much money is spent, but the way in which it is spent that counts. Any number of taskforces and goodness knows what else will not be able to close that gap.
	Whether it can be considered a triumph to achieve what the Chancellor calls sound public finances when taxation is nearing 39 per cent. of gross domestic product is in itself a question. What we do know is that his key policy mistake has been a massive transfer of resources into a largely unreformed public sector. His announcement of even larger spending increases on education and child care will, in my view, only make the situation worse. The long-term effect of the Budget will be a significantly higher tax burden, lower productivity and thus depressed growth, living standards and competitiveness, to our domestic and our international disadvantage. It is a huge disappointment that the Chancellor simply does not understand that while, of course, increased resources matter, so does a disciplined programme of expenditure matched with real reform and thus with better results. All the lessons of the past show that to be the case.
	Let us take education. The decision to increase spending by £19 billion a year in real terms from taxpayer funds is extraordinary, given the record of recent years. The Government have already increased schools spending by 66 per cent. in real terms since 1999 with no discernable change whatever in the trend in examination results and the quality of the finished article leaving schools. Extra spending might be justifiable if it were preceded by a major programme of reform, but reform—that is to say, management autonomy and parental choice—has proceeded most slowly in education out of all the public services. The truth is that the source of the problem is the failure to deliver, even now, with all this money, a good education. That is what parents want to see and it is what the country wants to see. That needs to be tackled with real and energetic reform and not just large amounts of low-flying cash.
	I was truly shocked that, as my hon. Friend the Member for West Chelmsford (Mr. Burns) pointed out, in the whole of the Chancellor's one hour and one minute speech, conducted at a decent gallop, he never even mentioned the national health service—almost the most important of all the Government programmes in terms of expenditure. I suppose that that is not really surprising given that he knows what he spends, but because the Government have totally failed to grip reform in the national health service, they have no idea what it really costs. The health service in my constituency and all over Sussex and elsewhere is struggling to cope with unfunded cost pressures, inherited debts and not enough time or support to help it through. With the greatest anxiety, I await the inevitable outcome of the cuts in services that must follow on from the situation of those health authorities. The excellent think-tank Reform estimates that, at the present rate of growth in the NHS, there will be a resource gap of £7 billion in 2010. That is an enormous sum of money and I would be grateful if the Paymaster General would tell me how she thinks that the Government intend to deal with that.
	After the expenditure of all this money, hard-pressed taxpayers are entitled to ask, "Where are these world-beating public services?" The Chancellor has indeed taxed too much and borrowed too much. Old Labour has got its way under this Chancellor, which is, of course, why the Labour party cannot wait, by and large, to get rid of the Prime Minister and to put in his place a more user-friendly animal. Let us face it: under the Chancellor, the pips really are squeaking. He has saddled the taxpayer with the highest tax burden in history. Families are literally groaning under the impact of the amount of money that the state takes from them.
	The Chancellor has imposed on commerce records levels of bureaucracy and red tape and he has blocked vital reforms in the public service. Even with some of the reforms that he has brought in, the valuable concept of a low-regulation, low-tax and competitive economy, which came to fruition in the later years of Baroness Thatcher and under John Major, is being rapidly eroded as business men and women sink every day into a bog of regulation and higher taxes. Had the Chancellor himself had the guts, will and determination truly to set about reforming the public sector by dealing with the vast array of old Spanish practices and the like that still remain, by increasing investment and by substantially extending choice in real terms, high-quality public services would today be available to everyone.
	Where exactly is this modern and efficient transport system or even its beginnings? Where is the infrastructure expenditure that is glibly promised every year? I urge the Chancellor to consider carefully a message that came from a seminar that I held in my constituency last weekend ahead of the wholly unsustainable programme of house building that is wished on Mid-Sussex and the surrounding area by the Deputy Prime Minister: there should be a far more even distribution of infrastructure expenditure across the growth areas. Let me give the Paymaster General an example. The Government are spending enormous sums of infrastructure money around Ashford and in Milton Keynes. Mid-Sussex, and north-west Sussex generally, are going to have willed on them by the Deputy Prime Minister an enormous number of houses—not significantly fewer than Ashford—yet there is no commensurate Government spending on public infrastructure. The Government need to acknowledge the firm feeling that they should honour their obligations for infrastructure expenditure, rather than simply passing them incontinently across to the developers who rightly already make a major contribution.
	I want to consider three areas on which the Chancellor and his people have done badly. I preface that by saying that I do not pretend that everything is bad. Many of the things that have been done are good. There are bits of our economy that are doing well, although, as I said, they should be doing well because of the Chancellor's remarkable inheritance.
	I will quote from a speech made in the House by the Chancellor in 1989, when he was shadow Trade and Industry Secretary, on a pensions scandal when, again, the ombudsman blamed the Government of the day for bust pension schemes. The then shadow Trade and Industry Secretary railed against the
	"fecklessness, gullibility and incompetence of the Government who, for months and years, ignored all the warnings"—[Official Report, 19 December 1989; Vol. 164, c. 204–05.]
	Today, the Chancellor who said that presents himself as the future leader of our country, but, frankly, he and the then Work and Pensions Secretary, who is now the Transport Secretary—I am sorry that he is not in the Chamber—debauched the public pensions system in this country.

Keith Vaz: It is disgraceful to say that.

Nicholas Soames: It is not disgraceful at all.
	The right hon. Member for Birkenhead (Mr. Field), the only welfare reform Minister whom the Government have had who was worth his stuff, said:
	"when Labour came to office we had one of the strongest pension provisions in Europe and now probably we have . . . the weakest".
	I say again that the Chancellor of the Exchequer is responsible for debauching the public pensions of this country. My hon. Friends will agree with every word of a passage from an article on pensions in The Times by Lord Rees-Mogg, who said that the Chancellor
	"took all the big decisions on pensions. He has wrecked the system of private pensions. He has wrecked the system of public pensions. He has destroyed the system of savings. He has tapped pensions by deliberate stealth.
	He has impoverished generations of old people, past, present and to come. The Chancellor's pension policy has been one of the great scandals of British financial history. He should be ever held responsible."
	Many Conservative Members will agree entirely.
	There was a great failing, too, by the Paymaster General. I am sorry to disoblige her, but the shambles of the tax credit system for which she is responsible is one of the most disgraceful episodes in the Government's history. Many people in my constituency and, indeed, throughout the country, are still paying the cost of that grotesque incompetence. The Chancellor has utterly failed to get a grip on the unfunded costs of public sector pensions and has made a unique contribution to off-balance-sheet accounting of well over £800 billion.
	Before I conclude, I applaud the Chancellor's determination to try to do more to prepare Britain to compete in the great global economy. Because of the war in Iraq, which I supported at the time, and which I still support, although I deeply resent the way in which the Americans handled the post-conflict arrangements and the trouble that flowed from that, the exercise of soft power has become even more important. America's soft power has diminished like the winter snows, and the country has lost almost all credibility abroad. America has 13 carrier groups that it can deploy throughout the world, but to bomb the living daylights out of 30 people is not the most sensible way of using military power. Soft power matters. Our country has a wonderful tradition of the use of soft power, and our assets include the BBC World Service, the British Council, British art and culture, the great traditions of democracy at Westminster, the monarchy and the law. All those things command great influence overseas, so they are vital assets.
	I am glad that the chapter entitled "Meeting the productivity challenge" in the Budget report includes a well-written passage about the United Kingdom as a competitive centre for global investment. However, when she deliberates on public spending I urge the Paymaster General to consider the need to deploy our soft power on an even greater scale. If we are to maximise the great opportunities afforded by the global economy, we must put more money into the great services provided by the British Council, the World Service and the Foreign Office. It is tremendously short-sighted to diminish the unbelievable expertise of the Foreign Office. Across the world, our remarkable diplomats do a wonderful job, so hacking away at the Foreign Office's overall budget is extremely short-term, bad politics and not in our national interest. It is in our national interest to make sure that those great assets are properly funded so that services do not struggle on a shoestring. A grotesque amount of money is spent ineffectively and inefficiently, and it would be spent much more efficiently and effectively by organisations such as the Foreign Office.
	When travelling abroad, Ministers are always begged to provide more training places at our military establishments, not just at the Royal Military Academy Sandhurst, Cranwell or Dartmouth, but at some of the engineering and signals establishments—wonderful sources of brilliant expertise and knowledge that are acknowledged all over the world as leaders in their field. We are wonderfully good at defence diplomacy. Lord Robertson, when he was Secretary of State for Defence—and a very good one, in my view—made much of that in his White Paper. With the cuts and the huge pressure on the Ministry of Defence and on manpower, it is important to remember that defence diplomacy is a huge plus for this country. It may not be a great big item in the context of the health service and the education service, but it is vital to our national interest.
	I had hoped that the Chancellor would announce yesterday a set of reforms to the planning system and the overweening bureaucracy and regulation that would release the energy of our economy. I am deeply depressed by what I heard from my hon. Friend the Member for Tunbridge Wells (Greg Clark) yesterday about the lack of integrity in the presentation of the Gershon figures. I hope that the Paymaster General will this evening give a truthful and accurate exposition of the Gershon figures. She may not have heard my hon. Friend say that the National Audit Office has not thought fit to sign off the Government's figures because it does not regard them as accurate.
	I hope the right hon. Lady understands that the overwhelming bureaucracy and red tape are the reason that companies such as Google, Oracle and Amazon locate in Dublin, rather than London. That is very bad news for us. Those are the very companies that we want to attract and which we used to attract. We face losing not just low-skill, low-paid jobs to big emerging economies, but much more seriously, high-skill, high-paid jobs. China and India are producing 4 million university graduates a year.
	The Chancellor's response to the global challenges facing Britain is to saddle this country with the highest tax burden in our history and record levels of red tape. I am glad to hear on all sides that the Chancellor has woken up to the international and domestic triumph that is the City of London. I declare my interest, which is registered in the Register of Members' Interests.
	The booklet entitled, "Financial services in London: Global opportunities and challenges" is a very good document that has been warmly received in the City. Having kept the City at a distance and not having helped it at all for years, finally the Chancellor embraces it as he knows he is about to become Prime Minister. That is a good thing, because the City of London has done more for the country than anyone could possibly imagine through its expertise and its overseas earnings.
	There remains tremendously important work to be done to fix a crisis in competitiveness, productivity, training and education to prepare our economy and our people of all ages for the global challenges that we face. This was not a Budget that prepares Britain for a new global economy.

Mark Lazarowicz: Tackling climate change and protecting the environment was one of the central themes of yesterday's Budget. When I saw that the Conservatives had put up the right hon. Member for West Dorset (Mr. Letwin) to open the debate, I thought that that would be a major theme of the Conservative contribution today. The right hon. Gentleman was evidently allocated to perform another role in the debate, but at least he did not perform it in the same foaming-at-the-mouth, carpet-chewing style of his leader yesterday, for which we must be grateful.
	Although the right hon. Member for West Dorset did not take up the issue of climate change and the environment, I should like to record my welcome for the fact that the Chancellor chose to put it at the heart of the Budget, thereby reflecting the increasing concerns of our constituents. Some environmental organisations have, naturally, criticised the Budget for not delivering all that they would want, but that is in the nature of campaigning organisations. That said, some elements of the Budget have received a positive response from those organisations.

Graham Stuart: The hon. Gentleman's expertise is recognised across the House. This Budget focused more on green issues than did the previous nine, but does he accept that the history of those 10 Budgets has been the Chancellor's failure to convert into action Labour's intentions before the 1997 election to change from taxing "goods" to taxing "bads" and fundamentally change this country's approach to its environmental responsibilities. That is why emissions have risen, and yesterday's Budget will make little difference.

Mark Lazarowicz: No, I do not accept that. We are on course to meet our targets, as long as we continue to take the right policy decisions. We must, however, do more to ensure that tackling climate change is at the centre of Government policy. Growing public concern has been reflected in this year's Budget and in previous policies. I hope that the general positive response that the environmental proposals have received—from the hon. Gentleman, it would appear, in some respects—will hearten the Chancellor and encourage him to do more to ensure that climate change is at the top of our priorities. In that context, important decisions will be made over the next few months about the emissions trading scheme, about bringing aviation into the scheme and about the response to the Stern review.

Edward Balls: What does my hon. Friend think that the green NGOs make of the fact that the Conservatives remain opposed to the climate change levy? What signal does that send about their environmental credentials?

Mark Lazarowicz: NGOs will draw a clear conclusion about the Conservatives' environmental credentials. I was about to come to the climate change levy, so I am grateful to my hon. Friend for reminding us of the Conservatives' continual failure to move an inch on the levy. They have made so many U-turns and flip-flops that it might have been easy for them to change policy on the levy, yet they remain obdurate in their refusal to do so.

Graham Stuart: Does the hon. Gentleman believe that the climate change levy, by being a tax on energy and not on carbon, is wrongly based? The Conservative party and four other parties have offered to work with the Government to tackle the biggest environmental issue facing the world, but the Government have refused. What does he think about that?

Mark Lazarowicz: I am going to come to the question of working together in a moment. The fact is that the climate change levy has led to significant reductions in carbon emissions. By 2010, it will allow the overall energy demand in the economy to be reduced by more than 6 per cent. Unless the hon. Gentleman is living on another planet, which I am sure he is not, he will at least accept that a fair element of the energy that we use originates from carbon. That is why the levy has a heavy impact on carbon emissions.
	It is not only me or the Government who say that. When I sat on the Environment, Food and Rural Affairs Committee in the last Parliament, we had an investigation into the means to tackle climate change. The various groups that came before us to give evidence did not say that the climate change levy was the wrong instrument but that it should be increased. That is why it is particularly welcome that the Chancellor said that it will be indexed so that it will be seen to have an impact on reaching our targets on CO 2 emissions.

David Taylor: There is no doubt that the Conservatives' environmental policies are incoherent and all over the place. My hon. Friend and I were fellow-members of the EFRA Committee in the last Parliament. Does he recall the evidence from representatives of the energy-intensive industries such as the construction products industries in my constituency, and brick-making, who argued that the climate change agreements have delivered the reduction in emissions? At a time of high energy prices, they would welcome some respite, but recognise that penalties are needed if CCAs are not complied with. They have a point, do they not?

Mark Lazarowicz: The two elements go together. On their present trends, the climate change levy and the climate change agreements will have a roughly similar effect in terms of a reduction of carbon emissions. They both have their role to play. Clearly, any tax can be refined and improved, but the key point is that the levy has had a significant impact on reducing emissions in the UK. Independent—not Government—research has shown that it has had a significant impact on the behaviour of businesses. Adding that fairly small, but visible, element to their costs encourages them not only to reduce their energy costs but to look at other ways of operating and improving energy overall, which has a positive effect on our carbon emission reduction targets. We must also bear it in mind that taken together, the overall effect of the reductions in energy demand and in national insurance contributions has been a reduction in costs for business as a whole. That has to be seen in the round. Elements can always be adjusted and improved, but the general direction is one that we should support.
	I am genuinely puzzled by the Conservatives' refusal at least to give some qualified backing to the climate change levy. They are entitled to say that they want to see change but this is not the right one and they would do something else in future. We get one or two hints of what that might be from vague references to a carbon tax, but merely saying that that might be the answer does not take us much further, because it could be applied in many ways. We have not seen anything representing a worked-out proposal from the Conservatives—perhaps we will hear about it later in the debate—so we have no idea of what alternative they would put in place.
	No doubt their conversion to the green agenda is genuine, although there may be some exceptions. However, they cannot tell us time and again that we will have to wait until the machinery—no doubt wind-powered—of Conservative think-tanks grinds out some kind of policy recommendation before they come off the fence on the climate change levy. Surely the right position, if they were really concerned about the issue, would be for them to say, "We don't think it's the best policy and it's not our preferred policy, but it's making a difference and having an impact. We will support it now and in the Lobby at the end of these debates on Tuesday, and in due course we will come forward with an alternative." Surely the Conservative party should not undermine a policy that has had a significant effect on reducing carbon emissions. Everyone who has an interest in the subject and knows about it realises that.

Dawn Primarolo: Perhaps my hon. Friend can reflect in his eloquent speech on the importance of the climate change levy and the contribution that it makes to reducing our carbon emissions. He will recall that, when the Government introduced the levy, the Conservative party not only opposed it but had no alternative suggestions for dealing with climate change.

Mark Lazarowicz: Indeed. Perhaps we are not much further forward but doubtless we will hear about it if such alternatives are proposed.

Tobias Ellwood: The hon. Gentleman questions the sincerity of the Conservative party's green credentials. Can the Labour party fulfil its 2001 or 2005 manifesto commitment to reduce carbon emissions?

Mark Lazarowicz: I do not question the sincerity of the Conservative party. I am prepared to accept that, for whatever reason, a change of direction has occurred. Conversion is one thing but it must be followed by specific policies if one is to make a difference and persuade the country that it is not some form of tactical, short-term change.
	Our policies are moving in the right direction and they have made a significant impact. The climate change review next week will outline the other steps that we are taking to try to ensure that we reach our international and national targets.

Graham Stuart: I believe that the hon. Gentleman is genuinely committed. Unlike with so many Labour Members, I do not find it necessary to denigrate the motives of my political opponent. However, he has not mentioned that, under the Government, CO 2 we have all said that we will do that—the climate change levy has an important role to play. I am therefore disappointed and genuinely puzzled by the way in which the Conservative party will not move on the issue.
	The Opposition's approach is unfortunate if we are trying to hold a serious debate on how to make progress on policy. I do not want to spend all my time on the climate change levy, but its beneficial impact on carbon emissions is acknowledged. If we cannot get even qualified Conservative support for it, we encourage disillusionment and cynicism outside the House, and the idea that all we do in here is talk about tackling climate change without effecting specific policies. I therefore hope that the Conservative party may yet reconsider its position.

Kevan Jones: Does my hon. Friend agree that we can now see the difference between the public statements that the Leader of the Opposition has made on climate change and what is actual Conservative policy? Where is the substance? Is it not clear from the fact that the Conservatives are not conceding on this issue that the gimmicky things that their leader has been saying over the past few weeks have no substance?

Mark Lazarowicz: I shall be more charitable than my hon. Friend. All I am saying is that I am posing questions on this issue, and that it is reasonable to expect answers from a party that claims to wish to be elected to Government at some stage in the future, although one might have doubts as to how soon that will be.
	Another reason why the Conservatives' refusal to move on the climate change levy is so unfortunate is that, in the past, the right hon. Member for West Dorset and other Conservative Members who have been involved in these debates have recognised that we need a broad political consensus if Governments are to have the political space to introduce the undoubtedly radical measures that are required to tackle climate change. If we cannot get practical evidence of support for a consensus on the climate change levy, we are entitled to ask how much chance there is of getting a consensus on the wider agenda.
	The Budget proposed an increase in vehicle excise duty for gas guzzlers, and I believe that that proposal has the support of the Conservatives, although I might be wrong. Some of their Back Benchers seemed to suggest that the proposed rate of duty was not high enough. Whatever their position today, however, there is no doubt that, a few years ago, such a Budget proposal would have caused uproar and resulted in all sorts of media campaigns against it. Now, however, the political atmosphere has changed, and such policies attract a positive response from the vast majority of the public, apart from a few moans and grumbles. We have yet to discover the Liberal Democrats' position on this, and I was surprised to hear some of the comments made by the hon. Member for Orkney and Shetland (Mr. Carmichael) earlier. Nevertheless, I believe that this proposal is generally accepted as the right thing to do.

Kevan Jones: Like my hon. Friend, I welcome that change. Is he, too, looking forward to seeing those on the Conservative Front Bench getting rid of their gas-guzzling cars and following the great example set by their leader in choosing an ecologically friendly Government car?

Mark Lazarowicz: When I cycled into the House of Commons yesterday morning, I was interested to see a large number of Conservative Front Benchers also coming in by bike. I am sure that that was not a one-off gesture purely for the purposes of Budget day, and I am equally sure that we shall soon see hon. Members from across the House following their excellent example.
	If we can achieve public consensus on an increase in vehicle excise duty on cars that consume more fuel, perhaps we can now start moving into a political space where we can take the even more difficult decisions that will be necessary to tackle climate change, particularly in terms of transport.

Paul Rowen: Does the hon. Gentleman accept that the Government's green taxes have not kept pace with inflation, and that they have actually fallen as a proportion of people's expenditure? If we are serious about introducing green taxes to encourage people to use more environmentally friendly cars or aeroplanes, they need to be uprated fairly regularly.

Mark Lazarowicz: The hon. Gentleman makes a reasonable point.
	We will have to revisit the level of tax on fuel for motor vehicles. However, the Chancellor said yesterday that he would delay the decision on an increase in fuel duty until later this year by continuing the freeze until 1 September, and there are good reasons for doing so. The present high level of world oil prices will clearly have had a bearing on that decision, which is understandable. However, I would not be surprised if there was a concern somewhere in the Chancellor's mind about the possible political consequences were we to return to a regular uprating of vehicle fuel duty.
	If we seriously look at the issue, we will all know that, in spite of recent increases, the cost of motoring in real terms has gone down over the longer term and that the increase in greenhouse gas emissions as a result of increases in road traffic has been an important contributor to the UK's overall greenhouse gas position. One of the most powerful factors influencing the extent of use of motor vehicles is the cost of motoring. We cannot get away from that. We all know that it is true.
	If we are really serious, we have to do something about the problem. Yet again, we have not heard any serious suggestions from those on the Opposition Front Benches about what we might do to recognise that reality. We certainly did not get them from those on the Conservative Front Bench. When the hon. Member for Rochdale (Paul Rowen) was not in the Chamber, I quoted from the comments made by the Liberal Democrat leader in the Budget debate yesterday. He criticised the new vehicle excise duty on 4x4s as being a very limited measure. I made the point that the impression that we gained from the comment made by the leader of the Liberal Democrats and repeated elsewhere during the day was that he was against the measure because it did not go far enough. He was in favour—so it would appear—of a higher increase in vehicle excise duty. That is certainly in line with what the hon. Member for Rochdale has just said. He nods so he seems to agree that he would like to see higher vehicle excise duty on the top-range vehicles.
	When I pressed this point with the hon. Member for Orkney and Shetland earlier in the debate, he seemed to say that he was not in favour of an increase in tax on the high fuel-consuming vehicles in certain circumstances. He seemed to say that he would be against such a measure in remote and rural areas. One suspects that there is a close correlation between remote and rural areas and Liberal Democrat constituencies. Once again, we see the Liberal Democrat tendency to talk green at one level, but to explain to their constituents that it will not really affect them. Someone else will be green, but not them.

Paul Rowen: I apologise for not being in the Chamber when my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) made his remarks. I was in the Standing Committee considering the Road Safety Bill. My right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell), who owns a Jaguar, made it clear that there should be a higher tax on his car. However, we must draw a distinction between farmers who may need a Range Rover to do their job—they can be recognised, and they are already exempt through the red diesel provision—and those who use their car for leisure. Exemptions could be made in certain circumstances. That is the point that my right hon. and learned Friend was making.The general point is that there must be a proper discussion about the use of green taxes if we are going to get people—

Mr. Deputy Speaker: Order. The hon. Gentleman has made his point.

Mark Lazarowicz: The point that I was making rather meekly was that the Liberal Democrat policy was to be in favour of being green in general, but not of being green in particular. I shall leave the House to decide whether the hon. Gentleman has refuted my assertion.

Edward Balls: Does my hon. Friend agree that, whether it is the top rate of tax or the top rate of vehicle excise duty, the Liberal Democrat position is still very hard to fathom?

Mark Lazarowicz: I cannot but agree. The position of the Liberal Democrats has been of some interest to the House, and I notice that, at the end of yesterday's debate, the hon. Member for Eastleigh (Chris Huhne), who also speaks for the Liberal Democrats on these issues, seemed to endorse the proposal from the Energy Saving Trust for the increase in VED at the top end of the range to go up to £2,000 rather than £200. That appears to be the direction of their policy, but no doubt it would not apply to Liberal Democrat voters living in Liberal Democrat constituencies.

Kevan Jones: Does my hon. Friend agree that for the leader of the Liberal Democrats, who, as we have heard from the hon. Member for Rochdale (Paul Rowen), drives a large Jaguar—clearly, he does not transport sheep around in it—the challenge would be to give up that vehicle as a good example for the green lobby in this country?

Mark Lazarowicz: The leader of the Liberal Democrats happens to be a constituent of mine, and I must admit that I have not seen him drive his Jaguar around the constituency with sheep or anything else in it. I shall leave it to him to make his choice.
	In directing my comments at the Conservative, Liberal Democrat and, for that matter, Scottish National party and Unionist Members, my purpose is to say that if we are to get a genuinely comprehensive approach to controlling emissions from motor vehicles, we must address the cost of motoring. Unless that cost gradually increases, we will see increasing use of motor vehicles, with the consequential effect on CO 2 emissions. If hon. Members accept that, as I am sure that they would, it is fair for me to ask them to give a guarantee to the House. Were the Chancellor, later this year, to go ahead with the increase in fuel duty, would they back him in that decision and not jump on a bandwagon with all sorts of unsavoury individuals to say why they cannot support an increase in that particular case?

Graham Stuart: The hon. Gentleman demeans his green reputation by playing party politics to cover up the Government's failure. There are serious points to be made in this debate, and he is more than capable of making them. Is he aware that this year, for the first time in a number of years, the CO 2 emissions impact of the United Kingdom's newly bought vehicle fleet is worse than that of the previous year's fleet? That is an unfortunate turn for the worse under this Government.

Mark Lazarowicz: I was not trying to go too far down the road of making party political points, but the nature of the Chamber tends to encourage one to do that. My fundamental point is that if we are to get a real political consensus on tackling climate change—a genuine one, not a notional one—that requires parties across the Chamber to recognise the steps being taken. When, later in the year, we inevitably debate the level of fuel duty, I hope that the same commitment to tackle climate change will be shown by Opposition Members, rather than, as often happens, they deciding to jump on whatever bandwagon seems most popular with voters in the short term.

Stewart Hosie: Will the hon. Gentleman give way?

Mark Lazarowicz: As I mentioned the SNP, I shall give way to the hon. Gentleman.

Stewart Hosie: The hon. Gentleman is generous. I also enjoyed the badinage between him and the Liberals. On a serious point, however, does he recognise the difference between a working 4x4 vehicle used by a hill farmer to take feed to a field of lambs in the late spring when there is snow on the ground, and a brand new Porsche Cayenne sitting outside a large house in Kensington?

Mark Lazarowicz: I recognise the difference. In those circumstances, however, I suspect that the costs could be reflected in other ways in the income and expenditure of the particular business, but that would take us in another direction.
	My point is that it is easy for people to say that they are in favour of increases in VED on gas-guzzling cars and then to find all sorts of reasons why it does not apply to them or their constituency. We have seen some evidence from the Liberal Democrats today that they are moving towards that approach. I had not expected to speak at such length, and I will try to conclude my remarks soon.
	Just as motor vehicles raise the issue of fuel duty, the increase in air travel raises the issue of the continual and worrying rise in greenhouse gas emissions and of what measures to implement in response. I would have liked an increase in air passenger duty in the Budget, or some alternative form of taxation, in recognition of the problem caused by the growth in air travel. If we are to have a serious debate, the Opposition parties should make clear whether they are or are not in favour of an increase in air passenger duty at least in line with inflation. The hon. Member for Eastleigh seemed to imply that he was in favour of such an increase, but it was not clear that that was Liberal Democrat policy.

Andrew Turner: While many of us may want an increase, or indeed the imposition of tax on aviation fuel, that view would be expressed more credibly by Labour Members if the Government were not expanding the supply of airport space. When the availability of airport space is restricted, the price of using that space goes up and the increase must be passed on to the consumer, but when the space expands, the price of air travel continues to fall.

Mark Lazarowicz: I have made clear my own reservations about the airport policy in so far as it affects my area and others, but I think that it would be wrong to think that the issue could be dealt with through airport policy alone. We must think about the pricing of air travel as well. It is a complex issue, and we are right to try and tackle it at a European and international level, but I think we could consider it here in the United Kingdom as well. I think that it would have been better if the Budget had provided for an index-linked rise in air passenger duty rather than a freeze.

Paul Rowen: Is the hon. Gentleman not aware that my hon. Friend the Member for Eastleigh (Chris Huhne), our environment spokesman, has made our policy very clear? It was discussed at our conference in Harrogate a few weeks ago. We are in favour of exactly what the hon. Gentleman has proposed.

Mark Lazarowicz: I am glad that we appear to be clear about the fact that that is the Liberal Democrats' policy, although I must say again—without wanting to become involved in the badinage in which some Members wish to engage—that it is a pity that the Liberal Democrat policy in theory is not the same policy that is applied in practice. In Scotland, where the Liberal Democrats are in government, the Liberal Democrat transport Minister is subsidising air travel to many parts of the world. Indeed, he recently introduced an air travel subsidy for, as it happens, the constituency of Orkney and Shetland. First-class as well as economy tickets are being subsidised. As I have said, it is all very well to have a policy in theory, but in the case of the Liberal Democrats we sometimes do not see the same policy in practice.
	We should think about what will happen if we are to be able to secure enough broad consensus and political space to allow Governments to take steps such as increasing air passenger duty. We all know what might well happen if there were a major increase: there would be all sorts of tabloid campaigns about its affecting people's ability to go on holiday, and so forth. That is why it is fair for me to ask the Opposition parties to be clear about their policy. We seem to have received a response from the Liberal Democrats, but it would be interesting to know whether the Conservatives are in favour of at least the index-linking of air passenger duty. The fact that none of them are choosing to intervene may speak for itself.

Russell Brown: I entirely agree with my hon. Friend. I do not believe that working families would want their opportunities to travel abroad for holidays to be affected in any way. Does my hon. Friend agree, though, that there is a fundamental difference between a rather inexpensive holiday abroad and flights being offered at 99p? That is sheer abuse, and we must try to control it as best we can.

Mark Lazarowicz: Indeed we must.
	Let me summarise the main points that I have tried to make in a speech that became longer than it was intended to be. I think that the Budget set out—as we apparently say nowadays—a clear direction of travel in terms of the priority given to tackling climate change and environmental policy, and I welcome that. I believe that we need to go further with fuel duty not only on cars and other such vehicles, but on aviation. I challenge the Opposition parties to make it clear that they are prepared to go in that direction and to provide the political space for the Government to implement such measures.
	I say again to the Conservatives that being prepared at least to reconsider their position on the climate change levy would be much greater evidence of their commitment to tackling climate change.
	This is a good Budget and I welcome its commitment to tackling climate change. I particularly welcome the extra funding given to microgeneration, a subject with which my private Member's Bill deals. Indeed, I should have declared earlier an interest in that regard, which is listed in the Register of Members' Interests. That Bill is an example of how we can make progress on such issues through broad, cross-party support. The public are genuinely interested in taking steps in their own homes and communities to respond to the challenge presented by climate change. I welcome the Government's decision to put climate change and environmental issues at the heart of the Budget, and in doing so they are responding to growing public concern about such issues.

Graham Stuart: I wish that I could welcome the Budget in the same way as the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz), but sadly, I cannot. Looking back at the 10 Budgets presented by this Chancellor of the Exchequer, the step on which to congratulate him is his granting independence to the Bank of England. Indeed, it is a pleasure to have here today the hon. Member for Normanton (Ed Balls), who is viewed by many as the true architect of that policy. As with quite a few other polices, it showed that after 18 years of Labour refusing to accept the reforms introduced, quite properly, by the previous Conservative Government, young new Labour figures such as the hon. Gentleman had at last grasped the importance of stability and a proper, market-based economy, and that they had accepted the settlement left behind by that Government.
	If this House is to contribute properly, be it on the environment or the economy, we should all try to deal with the facts as they are, instead of trying to spin every single fact purely for our own party political purposes. Unfortunately, such spinning is a Labour tendency, and I suppose that after three consecutive election victories, Labour Members may feel a bit like the Leeds United of the 1970s, who, by kicking their way to the first division title, came to think that that was a fine way to play the beautiful game. Well, in this political game, twisting the truth is not the right way to go.
	The acceptance that I and other Conservatives seek is acceptance that our economy's stability and growth started many years before the current Chancellor took office, and that the previous, Conservative Government turned this country from a basket-case in 1979—bankrupted by the socialism that is still expressed by interesting specimens on the Labour Back Benches—into the most powerful economy in Europe in 1997. If Labour Members would accept that, we could move on to a more constructive debate on the way forward.
	In considering what happened since Labour inherited the strongest economy in Europe, we should take note of the booklet produced as part of the Budget papers, entitled "Productivity in the UK 6: Progress and new evidence". It says that
	"productivity is the key long-run determinant of economic growth and . . . is even more important in an increasingly global world."
	The hon. Member for Normanton nods; he may even have been the author of those words. It continues:
	"In the long-run, economic theory"—
	we are definitely in the hon. Gentleman's territory there—
	"suggests that only increases in labour productivity growth can produce ongoing increases in living standards . . . productivity is the main determinant of improvements in national prosperity . . . because gains from labour utilisation are limited."
	That is the Government's policy on productivity, so let us look at the record.
	From listening to Labour Members, one would think that the Government had taken triumphant steps forward on productivity, which is, they say, the key determinant of the future prosperity of this nation, but they have not. In Labour's first term, productivity growth was 2.1 per cent. In Labour's second term, it dropped to 1.3 per cent., and in Labour's third term so far there has been a 0.4 per cent. increase in productivity. The key determinant of the future strength and prosperity of this nation has been systematically undermined term by term by this Government. In comparison, the last five years of the Conservative Government, from 1992 to 1997, saw productivity growth of 2.6 per cent.

Stephen Hesford: The hon. Gentleman's memory is selective. What were the figures for productivity between 1980 and 1982, when there was a recession, and between 1988 and 1992, when there was a further recession? Those were the circumstances with which my hon. Friend the Member for Normanton (Ed Balls) and others had to grapple to ensure that we did not return to those days.

Graham Stuart: As the hon. Gentleman knows, as this country went from a socialist basket case in 1979 to the most powerful economy in Europe in 1997, there were difficult decisions to be made. The British people were involved in times of great sacrifice, including depressions and high interest rates. The overall balance was, of course, the transformation—Labour Members know this full well—of this country's economic base between 1979 and 1997.
	This Government inherited the strongest economy in Europe—[Interruption.] Well, I do not know whether Labour Members have any interest in manufacturing but it has, historically at least, been important to this country. In the last four years of the Conservative Government, manufacturing employment increased by some 200,000. Since Labour came to power, manufacturing employment has fallen by 1.1 million.

Edward Balls: Will the hon. Gentleman give way?

Graham Stuart: I am delighted to give way to the hon. Gentleman, who will be able to explain why this Labour Government have destroyed manufacturing jobs, whereas under the previous Conservative Government such jobs were increasing.

Edward Balls: There are so many different points that one could make that it is difficult to know where to start, but this is only an intervention. Between 1980 and 1982, manufacturing employment fell, not by 1.1 million but by 3 million, as a result of the deepest recession since the second world war. That was then followed between 1990 and 1992 by the longest recession since the second world war. We can trade statistics, but does the hon. Gentleman agree that, in retrospect, it was a mistake for the Conservative party to vote against Bank of England independence in 1997?

Graham Stuart: I entirely and happily agree that the independence of the Bank of England was a good thing. However, the hon. Gentleman has failed to recognise the transformation that I have described. He is more knowledgeable on matters economic than most of us, but he is still too grudging to acknowledge that. I have noticed that almost every one of his contributions in the House seems to be a partisan attack on an Opposition party.
	The House would benefit from the hon. Gentleman's intellect and—as I know privately—charm, if he used them constructively to deal with the world as it is and not as a partisan punch ball. Any fair-minded or neutral person would recognise my description of the background when the Government came to power.
	In my constituency, the number of people employed in manufacturing in the last three years of the last Conservative Government increased by 3,000; since the Labour Government came to power, those jobs have reduced by 1,600. That is a lot of families whose jobs have been destroyed. By undermining manufacturing, the Government have helped to undermine the future prosperity of the country.
	Earlier I mentioned some figures that showed the contrast between 1997 and the present, but they are worth repeating. In 1997, when the Chancellor came to power, inflation was lower than it is at present—contrary to the impression one might receive when listening to Labour Members. The rate of inflation in 1997 was 1.8 per cent., compared with 2.1 per cent. in 2005. Real GDP growth in 1997 was 3.2 per cent., compared with 1.8 per cent. at present.

Stephen Hesford: rose—

Graham Stuart: I hope that the hon. Gentleman is about to acknowledge the strength of the economy in 1997 and the turnaround that had taken place. It would be a step forward if some honesty started to appear in the speeches of Labour Members.

Stephen Hesford: The hon. Gentleman is generous in giving way. It is not so much 1997 that I want to talk about, but the accuracy of the figures that he is coming out with. Is he comparing like with like? The two inflation figures that he has given were calculated on a different basis.

Graham Stuart: I am taking the figures from Government statistics, so I could not possibly say whether they had been manipulated—whether appropriately or not. Perhaps the hon. Gentleman has a better idea about that, especially as so many of the statistics produced by his right hon. Friend the Chancellor have so often proved elastic—shall we say?—in their derivation.

Russell Brown: During the Budget debates in 1997, the right hon. Member for Wokingham (Mr. Redwood) came very close indeed to admitting that when the Conservatives left power the economy was on the verge of overheating.

Graham Stuart: It is extraordinary to have a speech from nine years ago in which someone almost said something mentioned as strong evidence against the case being put. That perfectly encapsulates the weakness of the arguments of Labour Members. If that is the strongest question they can put, they have no case at all.

Russell Brown: rose—

Edward Balls: rose—

Graham Stuart: I have been generous and I will give way to the hon. Gentleman in due course, but I want to make some progress, and it is certainly clear from the intervention of the hon. Member for Dumfries and Galloway (Mr. Brown) that no progress will quickly be made by giving way to Labour Members, who will not accept the most basic facts about the economy.

Edward Balls: rose—

Graham Stuart: Well, I will give way to the persistent hon. Gentleman.

Edward Balls: May I clarify the situation? My hon. Friend the Member for Dumfries and Galloway (Mr. Brown) is right: in 1997, while inflation was low, the problem with the economy was that it was growing too strongly. When the Labour Government came to power, Treasury forecasts predicted inflation moving above 4 per cent. over the next year. The hon. Member for Beverley and Holderness (Mr. Stuart) may remember that in the six months before the change of Government, the then Chancellor of the Exchequer had constantly ignored advice from the Governor of the Bank of England that interest rates needed to rise. The change of Government and Bank of England independence actually restored stability to an overheating and dangerously inflationary economy.

Graham Stuart: The hon. Gentleman makes a unique argument in the House against the last Conservative Government—that growth was too great. Growth was great in 1997, and growth, particularly in productivity, has fallen off since. He will have written many essays on the importance of productivity as the key determinant of the future prosperity of this nation, but he has failed to come back at all on the Government's productivity record. I would particularly enjoy an intervention on that subject.

Edward Balls: I am extremely happy to come back on that specific point. The figures set out clearly in the Red Book and in the document to which the hon. Gentleman refers show that, over this economic cycle, the productivity growth rate has been higher than in the previous economic cycle, when the Conservative Government were in power. Those are not just the Government's figures; the National Audit Office has audited the trend rate of growth. Under this Government, the trend rate of growth in the economy, based on rising employment and productivity growth, has gone up. So I am afraid that the facts are the opposite of what the hon. Gentleman implies.

Graham Stuart: I am afraid that no light was thrown by that intervention on the fact that productivity has not been growing under this Government. Interestingly, that brings me to my next point, which relates to the figures produced by the Chancellor. I welcome something else in yesterday's Budget: the fact that the gathering of national statistics will be put on a truly independent basis. Opposition Members have been saying for many years since the Chancellor came to power that, unfortunately, the public no longer trusted the figures that he provided.
	Yesterday's debate on the Budget threw up, in a powerful speech by my hon. Friend the Member for Tunbridge Wells (Greg Clark)—the main points of which are well worth repeating, given that the Chancellor's key aide is here—the fact that John Oughton, the head of the Office of Government Commerce, which is the main watchdog to ensure that procurement is carried out properly in government, was asked at a sitting of the Public Accounts Committee:
	"As I understand it, the process of collating this information involved the Treasury ringing round departments asking what savings they could offer up in time to be mentioned in the Budget with no checks at all."
	That was in the context of coming up with the £2 billion in Gershon savings that the Chancellor mentioned last year. When that question was put to the head of the OGC, he replied:
	"That is an accurate statement of the gains as they were reported in the spring of 2005."
	That is a damning condemnation of the way that the Chancellor of the Exchequer is prepared to manipulate figures to come up with whatever is required to provide him with a political platform. This year Sir John Bourn, the Comptroller and Auditor General and head of the National Audit Office, offered to check the figures, and my hon. Friend told us yesterday:
	"Once again, the numbers that the Chancellor presented as definitive Gershon savings have not been signed off by the National Audit Office."—[Official Report, 22 March 2006; Vol. 444, c. 371.]
	In that context I, along with other Opposition Members, welcome the prospect of a proper, independent national statistics service in future.
	Yesterday's Budget speech was over an hour long, but the Chancellor did not mention the NHS even once. Could that be because when there is a problem the Chancellor distances himself as fast as he can? Is there is problem in the NHS today? Absolutely. The Chancellor of the Exchequer, who has been the road block to reform—the man who said before they came to power that a Labour Government would be wise spenders, not big spenders—has splurged spending on the NHS without proper reform. That is why people ask, "How has all this money been spent with so little to show for it?" The number of NHS administrators has increased by 66 per cent., whereas the number of doctors and nurses has increased at a fraction of that percentage. The Prime Minister's own policy unit said in 2004 that health service productivity had fallen by 20 per cent. since the Labour Government came to power.
	At the heart of what is wrong with the Government is the fact that all we ever hear from them, in the context of the Budget or anything else, is a reiteration of their spending levels. No one is in doubt about the level of spending; what is in doubt is whether that spending has been wise. It has been big, but it has not been wise.
	I looked at the chapter on improving productivity in the Red Book. One acronym did not appear at all in that chapter, or in the Chancellor's speech: NHS. The Red Book had nothing to say about improving productivity in the NHS. However, there is a chapter called "Understanding Productivity"—a useful section for the Chancellor of the Exchequer, after so many years of failing to promote it in the private or the public sector—in "Productivity in the UK 6". We find that, despite its being said that productivity is the main determinate, the truth is that while spending has doubled, productivity on the standard measures in the NHS has fallen. Page 22 of "Productivity in the UK 6"—this is where we have to look to find the truth of what has gone on in our NHS—states:
	"Estimates using National Accounts measures showed an average fall of between 0.6 per cent. and 1.3 per cent. a year over the period 1995–2004."
	Spending on the NHS has doubled. The number of bureaucrats and administrators has been increased by 66 per cent., yet productivity in the NHS—the supposed show piece of this Labour Government—has fallen. That is why, across the country, thousands of health workers have already received notice that they will lose their jobs and thousands more are waiting to be told that. A financial deficit afflicts the national health service because of Labour's mismanagement and failure of understanding. I hope that the Minister who responds later will deal head on with the issue of productivity in the NHS and what can be done to turn round the lamentable record so far, so that the record sums that have gone into the NHS can show through in an improvement in treatment.
	I already feel as though I have tried your patience, Mr. Deputy Speaker, but I would like to finish on the subject of the environment. The Chancellor's raids on pensions and the undermining of the security of hard-working people in old age has been disgraceful, and the failure to produce honest statistics has been equally shabby, but the Chancellor has been a complete and utter disgrace on the environment. There has been a failure to deliver on the promises that were made before the Government came to power and, at every step—every Budget—it has been the Chancellor who has failed to deliver the mechanisms by which the country could change from a policy of growing emissions to one of cutting them.
	The global leadership that the leader of the Labour party is so keen to spout worldwide is not matched by any kind of improvement at home. The masking effort carried out by Labour Members in using the climate change levy as the sole test of any politician's environmental credentials is false. We have the climate change levy and we have a Labour Government—and under that Government emissions have risen. To be posing as in any way environmentally friendly while emissions have risen is nothing short of disgraceful.
	Be it on pensions, productivity, or honesty and statistics, the Government have failed. On the environment, and on the long-term future of the country and of the world, perhaps they will be seen by many to have failed most of all.

Nigel Dodds: We are having a wide-ranging debate. Several hon. Members mentioned pensions and I know that others wish to speak, so I shall briefly focus on matters relating to pensions and, especially, the plight of our poor pensioners, before talking about business competitiveness in Northern Ireland and the opportunities that the Chancellor missed in his Budget to help in that regard.
	I acknowledge the improvements over recent years that have been made on pensioner poverty. I also acknowledge that the Chancellor announced yesterday the national bus scheme that will give pensioners free bus travel. There will also be increased funding for the insulation programme and the retention of the winter fuel allowance. However, the Chancellor failed to address several aspects of pensioner poverty. As several hon. Members have said, there is deep concern and anger among many people about the failure to continue the council tax rebate, which was applied as a rate rebate in Northern Ireland. Many people think that as the rebate was announced in the run-up to last year's election, the Government have cynically refused to continue it this year because they know that the next election will be some time away.
	If there was any logic behind the Government's position on the rebate, they would have carried forward something in the Budget for pensioners today. Pensioners will face enormous increases in their council tax bills. Those in Northern Ireland face an enormous increase in their rates bills because the Secretary of State for Northern Ireland has increased the regional rate for this year by 19 per cent., which is massively over the rate of inflation. The situation is causing great concern in my constituency, which has a high proportion of elderly people. How will they meet that sort of increase when they also face the imposition of water charging for the first time, as well as swingeing increases in electricity and gas prices? When the Paymaster General winds up the debate, will she tell us why the rebate has simply been left out of this year's Budget? What possible explanation can there be for giving welcome assistance and help last year, but none whatsoever this year? Pensioners up and down the land deserve an answer to those questions.
	I welcome the fact that the winter fuel allowance will be retained, but there is a question mark over why there has been no increase to the allowance whatsoever, even to take account of inflation, since its introduction in 2000. The sum of £200 would have bought a household considerably more fuel back in 2000 than it would today, especially given the recent price increases. In view of the Government's commitment to combating fuel poverty, I would have thought that the Chancellor could increase the winter fuel allowance from its level of £200, at which it has been stuck for six years. I have no doubt that Ministers could point to the fact that the situation is a major improvement on that which went before. I accept that and pay tribute to the Government for what they have done. However, after such a length of time, surely there is an unanswerable case for increasing the winter fuel allowance to bring it in line with its original value in 2000.
	A lot has been said about the Chancellor's raid on the pension funds when he first came to office. Several hon. Members have talked about crises, and many tens of thousands of people in this country are affected by the crisis caused by the closure of company pension schemes that have shortfalls. I accept that the Government have brought forward the Pension Protection Fund and the financial assistance scheme, but the fact of the matter is that although some 85,000 people and their dependants have been put in a real crisis through no fault of their own, the Government have rejected completely and utterly the findings of the parliamentary ombudsman following the investigation of the matter.
	The Government have failed to provide those people with any hope of a decent standard of living in their later years, even though they paid into pension schemes in good faith—and were advised to do so by Government leaflets. The ombudsman found that the Government were at fault, but they have simply rejected that finding, not only undermining the office of the ombudsman, but leading people to question whether they should invest in pensions at all. If that is the Government's reaction to the findings of an independent ombudsman, can people have faith that if they follow today's advice about investing in pensions for the future they will not be out of pocket and facing a dire future in old age?
	The Government have a responsibility and they must do more. Some of my constituents who worked for Richardson's IFI plant in north Belfast—Joe Blair was one of the test cases at which the ombudsman looked—are in dire straits. They believe that they were robbed, not just by the initial collapse of their pension scheme, but latterly by the Government's failure both to accept the ombudsman's report and to rescue them from poverty, heartache and hardship. The Government say that it would cost £15 billion to £17 billion to do so and that they cannot find that money. The fact is that money could be found to compensate those pensioners, not least from unclaimed assets. The Chancellor has said that he will use some of those assets for youth provision—a fine and laudable objective—so why can he not use them to fulfil his responsibilities to those pensioners? It is a very serious issue and I urge the Government to treat it as such. There is an urgent need to rescue the lives—I put it as strongly as that—of people who are in very bad way indeed as a result of what has happened to them through no fault of their own.
	On the more general issue, we await the outcome of the consultation on the Turner report, but we need help for today's pensioners as well as tomorrow's pensioners. There is a growing reliance on means-testing to help our poorest pensioners. Initially, means-testing was necessary to target resources on the poorest pensioners, but in 2006 that is counter-productive. Forcing more and more people to apply for means-tested benefits and pension credit is a disincentive to save. It is demeaning for many people, who find the application process difficult. The figures clearly show that a great deal of money to which people are entitled has not been claimed. The outcome of the consultation on Turner should be that we move away from means-tested benefits and implement a properly funded, decent state pension that is indexed to earnings. That is the way forward.
	Turning briefly to business competitiveness in Northern Ireland, in the next few weeks there will be a renewed effort on the wider political front to achieve political progress there. I hope that it is possible to achieve progress and restore devolution on the basis of adherence to democratic values, but even if devolution is restored and local people can make decisions through their local representatives, the reality is that many decisions by the Treasury, and by the Chancellor in particular, will be more important than all the decisions by local Ministers in Northern Ireland combined. In particular, that applies to Government fiscal policy and rates of corporation tax, which affect business competitiveness. In infrastructure and skills, Northern Ireland is every bit as competitive as our neighbours, but we lose our competitive edge in the cost of doing business.
	Some of the difficulties faced by businesses in Northern Ireland are the same as those experienced throughout the country. The challenge to business from eastern Europe and south-east Asia is felt right across the United Kingdom, but there are problems that are unique to Northern Ireland. Central to that is the fact that we share a land frontier with the Irish Republic. A 30 per cent. corporation tax rate in Northern Ireland puts business at a major competitive disadvantage with our counterparts in the Irish Republic, where corporation tax sits at 12.5 per cent. No matter what incentives are offered and no matter how skilled our work force is, it is difficult for the Province to compete when there is a corporation tax of 30 per cent. in Newry, for instance, whereas three miles across the border it is 12.5 per cent.
	It is the Government's stated wish to see the private sector grow in Northern Ireland, but we have higher energy and transport costs than the rest of the United Kingdom and higher corporation tax rates than the Republic of Ireland. We must be allowed to compete on a level playing field. If we are to be a competitive and effective economy, and if the Government want less reliance on the public sector, which we want as well, the appropriate fiscal arrangements must be put in place. I regret that an opportunity has been missed in the Budget for the Government to address some of those issues. The levy on fuel duty at the present rate in Northern Ireland, compared with the Irish Republic, encourages fuel smuggling and fuel laundering. The Government need to deal with that.
	Local politicians in Northern Ireland want devolution to be restored. We want local Ministers to have responsibility. Free transport for our pensioners, for example, was a policy introduced by Democratic Unionist Ministers in the former Northern Ireland Assembly, so we welcome the fact that the rest of the country is catching up with us. However, there is only a certain amount that a devolved Administration can do. Tax rates will continue to be set here in the House and by the Government here at Westminster. On behalf of the business community and our economy in Northern Ireland, I appeal to the Government to consider the particular circumstances—the disadvantages that we suffer as a result of sharing a land border, and the difficulties that we suffer as a result of the differences in corporation tax rates between the Irish Republic and Northern Ireland. I urge the Minister to address those issues when winding up the debate.

Stephen Hesford: I am sure that the House looks forward to the devolved Assembly being reconstituted. We, like the hon. Member for Belfast, North (Mr. Dodds), wish the Northern Ireland economy continued success.
	This is the second Budget debate in which I have spoken since I entered the House. The first was our first Budget in 1997. It is good to be back and to review what we have done in the interim. It has been said that, where there has been success in the economy, it is because of the legacy that we inherited. I wonder how long that can be said with any credibility. If there are alleged defects in the economy, that is said to be entirely our fault. I am not sure how Opposition Members can credibly have it both ways, but those who have addressed the Budget seem to be arguing that. I look forward to the winding-up speech from the hon. Member for Wycombe (Mr. Goodman) to see how he can square that circle. Which is it: the inheritance and the economy are good, or the economy is not so good and it is our fault? Which would the Conservatives have the public believe? I know what I have observed between 1997 and today.
	Listening to the Leader of the Opposition's speech, it occurred to me that he is a digitally remastered version of the right hon. Member for Richmond, Yorks (Mr. Hague), who between 1997 and 2001 had nothing to say on policy but cracked a few good jokes. Once the public realise that the only difference between the two right hon. Gentlemen is that the Leader of the Opposition has hair, I look forward to them reacting the same at the next election as they did in 2001, and—

Mr. Deputy Speaker: Order. Perhaps it would be a good idea if the hon. Gentleman started to address the Budget.

Stephen Hesford: rose—

Paul Goodman: The hon. Gentleman appears to be under the misapprehension that the success of the economy depends on Labour or Conservative Governments. Will he acknowledge that the success of the economy depends on the strength of British business? The question is whether this Government are making things better or worse, and I shall address it when I wind up the debate.

Stephen Hesford: I look forward to that. The hon. Gentleman will want to deal with the record growth and stability under this Government, with 54 periods of continuous growth—an achievement that no previous Government have managed.
	I wish to deal with the success that my constituents have enjoyed over the past nine years and the background to the Budget. Our economy has faced oil price shocks. We have had the highest sustained oil prices for a quarter of a century, which have doubled since 2004 and trebled since 2002. Growth among the eurozone economies has been slow, yet the UK had the largest export market in 2004 and 2005. Those are not merely figures, they are the underlying reasons why employment in my constituency is at record levels.
	In previous decades, faced with such challenges, our economy would have tipped into recession. Indeed, I intervened on the hon. Member for Beverley and Holderness (Mr. Stuart) to remind him of the two largest shocks that the UK economy had suffered since the war under the previous Conservative regime. Inflation rose to 25 per cent. and unemployment passed 2 million. That is what used to happen, but it has not happened this time. That is a key backdrop to the Budget that my right hon. Friend delivered yesterday.
	Labour's economic reforms have helped the UK economy continue to experience successive periods of growth. In 2005, the UK's economic growth was higher than that of any other major European economy. These things do not happen by chance, and I certainly do not accept the argument that it is down to inheritance. We have low inflation and stable interest rates, which are key to hard-working families in my constituency. In the previous years of boom and bust under the previous regime, any parts of the economy that did well tended to be in the south-east, while the north-west, where my constituency is, suffered at the hands of the mismanagement that occurred. Under this Government, we have low inflation, stable interest rates and stable growth. The north-west has benefited from that, as have all parts of the country in their respective ways.

Graham Stuart: Would the hon. Gentleman care to read something other than the brief that he has been given by the Labour Whips? If he bothered to read, "Devolving decision making: 3—Meeting the regional economic challenge", he would find that this Government have failed to narrow the so-called north-south divide. In fact, they have compounded the problem, contrary to the contention that he advanced, having strayed momentarily off-piste from his brief.

Stephen Hesford: The hon. Gentleman's constituency is across the Pennines from mine. If he knew the region that I come from, Merseyside, he would know that it is going forward. Liverpool is to become European capital of culture in 2008 and the open golf championship is to come to Royal Liverpool golf club in my constituency in 2006 for the first time in 40 years. That was made possible by a package put forward by the Labour-led council, backed up by the economy that I am describing. In previous years, the open golf championship disappeared from my area because of the lack of investment and no infrastructure being put in. All hon. Members, from whichever party, are welcome to come to Hoylake for an enjoyable week when it takes place. There is no need for them to write to tell me that they are coming. [Interruption.] I cannot put everybody up, unless they want to sleep on the floor.
	The International Monetary Fund recently reported:
	"Macroeconomic stability remains remarkable . . . supported by sound policies implemented by strong institutions and underpinned by monetary, fiscal, financial, and structural policy frameworks that have increasingly instilled confidence in the authorities' conduct of macroeconomic policies."
	Hon. Members may laugh, but those are the true circumstances, not the fictions that we have heard so far.
	When the leader of the Conservative party made his opening speech yesterday, why did not he deal with the Budget speech, but deliver a prepared, pre-arranged rhetorical eight minutes—the shortest response to a Budget speech in living memory? He did that because he truly represents his party, which has nothing credible to say about the Budget.
	The global economy is undergoing a major transformation. As my right hon. Friend the Chancellor said yesterday, the Budget takes the UK economy forward in an increasingly difficult global economic environment. Far-reaching and fundamental changes have been driven by technological advances, greater international trade, investment and rapid growth in emerging markets such as China and India. I look forward to the winding-up speech of the hon. Member for Wycombe and the Conservatives' response to the challenges of those two rapidly expanding countries. He does not appear to recognise what I am saying—

Nicholas Soames: What is the hon. Gentleman saying?

Stephen Hesford: I am saying that this country's economy will survive the challenges of the new economies in the east whereas, under a different regime, we would have tipped into recession. That was the previous Government's record—any kind of shock tipped us over.

Peter Bone: Does the hon. Gentleman realise that trade with India is decreasing rather than increasing under the Government?

Stephen Hesford: That is because the Indians got off to a quick start. However, our economy will survive India's rapid growth and thrive on it. We will conduct more trade with India, which will become another economic partner. The Labour Government have enabled Britain to be better equipped for such challenges.
	The Government will support parents and families to survive the shocks, balancing work and family needs through tax credits. Unlike some other hon. Members, I pay tribute to my right hon. Friend the Chancellor for introducing the tax credits, because, in my constituency—I can speak only for my constituency—they have been a success. Six thousand families in my constituency benefit from tax credits and the new maternity and paternity rights that are coming on stream. In other parts of the Wirral, not necessarily strictly in my constituency, Sure Start and nursery education make important positive differences.
	Let me deal with the Budget itself. [Hon. Members: "Thank goodness."] It is well worth waiting for. Economic growth will continue under the Government. I have spoken about the 10 years during which I have watched the delivery of Budgets. The four if not five previous shadow Chancellors have predicted recession regularly.

Rob Marris: Every year.

Stephen Hesford: My hon. Friend is right. That has happened every year, and they have been wrong every year. My right hon. Friend the Chancellor predicts that the economy will pick up from 2.7 per cent. to 3.25 per cent. in the coming economic period and I look forward to that. I wonder whether the Tories will make another prediction that will be proved wrong. [Interruption.] The hon. Member for Wycombe laughs—I await his speech with interest.
	Public borrowing is on course for meeting the golden rule, as it has been since 1997. There will be a £16 billion surplus in the cycle that ends in 2010–11. Employment has risen in my constituency. There are 170,000 more people in work since last year's Budget. I have not been able to discover the figures for my constituency, but I am told that the £970 million shared equity scheme will help 35,000 people in the UK, and I look forward to it benefiting some of my constituents.
	The environment was a key part of the Budget, a fact that has been welcomed by many of my hon. Friends, not least my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz). The climate change levy presents a challenge. It has been opposed by the Conservatives in successive years, and they have not yet signed up to it. That represents a key dividing line between us. I am pleased that my right hon. Friend the Chancellor has taken the difficult but important decision to increase the levy in line with inflation. No doubt the Tories will argue that they oppose that proposal for business reasons. They certainly have not welcomed the climate change levy in principle. I would like to hear whether they are in favour of it in principle and whether they support its uprating.
	I welcome the £1 billion for the establishment of an environmental research institute. I also welcome the change that my right hon. Friend has made to the taxation of car use. Cars with the lowest emissions will attract no vehicle excise duty, while the 1 per cent. of cars that cause the most pollution will attract duty of £210. That is the right way forward and I hope that Members on both sides of the House will welcome those measures. The Chancellor will revisit the level of fuel duty in September and it remains to be seen whether it will be increased. The delayed decision must be seen in the context of the rise in world oil prices and we shall have to reassess the situation in September.
	The hard-working families in my constituency will benefit from the rise in personal allowances to £5,035, and the rise in the child element of tax credit to 14 per cent. over the next few years. I welcome that, as will those families. I am not so sure about the 1p on a pint of beer, but I certainly welcome the 9p on a packet of cigarettes. I was one of those who pressed strongly for the ban on smoking in public places and the increase is a social measure as well as an economic one. I also welcome the rise in stamp duty exemption to £125,000 and the inheritance tax figure moving up to £325,000.
	There is another potential dividing line between Opposition Members and ourselves about which little has been said by the Opposition so far. I heard a conversation between two Liberal Democrat MPs yesterday, following the announcement of the increase in the child trust fund to £250—£500 for lower income families—at age seven. Their initial reaction to that announcement was, "Good. That's more money allocated that we can take back when we abolish it."

Rob Marris: Name them.

Stephen Hesford: When the Liberal Democrats come to wind up, I would certainly welcome an assurance that they would not abolish the child trust fund, although I suspect that I would be disappointed in that hope.
	I have already mentioned the sporting successes in my constituency, in regard to the open golf championship. I have looked fondly at our success at the winter Olympic games and, in particular, at the Commonwealth games, on the back of the investment from UK Sport and the Government. I therefore welcome the £600 million for world-class British athletes that, I hope, will build on that success in the years to come.
	I wait with interest to see whether the decision to increase investment in education that my right hon. Friend announced yesterday will be supported by the Opposition. That was a key political statement. Such decisions are not taken easily, but they are taken for the principled reason that we should invest in the future of ordinary, hard-working families and their children so that they can make the best of their natural abilities and compete on a level playing field in the best possible circumstances with the 6 to 7 per cent. who benefit from private education. Although I do not begrudge people their private education, I want the vast majority of children to have access to the best. My right hon. Friend was brave and correct to come to such a decision and that will not be lost on the mums, dads and grandparents in my constituency.
	One might say that making such decisions is what a Labour Government should be doing, and it is the sort of the thing that this Government are doing. I ask all parties in the House to support this decision and to do so not just in principle by saying that they think it is a nice idea, but to do so by agreeing to guarantee the money not just for one year but for each and every year until 2011 when the rise in spending will take effect. I also welcome the additional £585 million that will be distributed directly to schools throughout the financial year 2006–07.
	Community support officers are making such a difference in my constituency. Their introduction was opposed by Conservative Members even though I believe that Members on both sides now support the work that those officers do. I am therefore delighted that my right hon. Friend the Chancellor is building on their success by doubling their number to 16,000 at a cost of another £100 million.
	I am also delighted that my right hon. Friend has seen fit to copy the very good free transport system that we have had for a long time in Merseyside and extend free pensioner travel across the country. That will be very much welcomed on both sides of the House. It will certainly be welcomed by pensioners in my constituency who were able to travel throughout Merseyside for free, but became frustrated when they reached the border and had to start to pay for their travel.
	It has been argued that the NHS was not mentioned in the Budget speech. Since I first spoke in the House in 1997, I have watched the economy and my local health service. I have regularly visited my local NHS trust and all the other health services in my area in my nearly nine years in Parliament. I do not deny that there are difficulties in certain trusts—others can address that issue—but the NHS in my area certainly speaks for itself. I am very pleased that it does.
	I welcome the Budget and I am delighted to have been able to take part in the debate. Perhaps I should have started with this, but I apologise to the House for not being present for the beginning of the debate. However, I am grateful to have had the chance to speak.

David Gauke: It is a great pleasure to follow the hon. Member for Wirral, West (Stephen Hesford) who, as ever, delighted the House with his fluency and wit. Certainly, there was a fair degree of laughter on this side of the House, and I am grateful to him for that. I wish to return to the issue of productivity raised in the forceful speech of my hon. Friend the Member for Beverley and Holderness (Mr. Stuart).
	Productivity is hugely important, and the Chancellor devoted much of his speech to measures intended to improve it. He has said in the past:
	"Productivity is a fundamental yardstick of economic performance, and poor productivity condemns a nation to be held back."
	There is an element of complacency about productivity in the documentation produced by the Treasury. The impression gained is that the Treasury is rather proud of this Government's productivity record. The hon. Member for Normanton (Ed Balls) intervened on that point earlier to say that, as is stated in the Red Book, the evidence points to raised productivity growth over the current cycle compared with previous cycles. I think that that is the gist of his remarks.
	Interestingly, that same point was made to an economist on "Newsnight" last night, who replied that the current economic cycle has yet to be completed, so there are a number of years in which productivity is expected to be low as part of that cycle. Therefore, the comparison is not like with like. The expression that she used to describe the Treasury's presentation of the productivity figures was "sleight of hand". I am not an economist, so I am in no position to say whether she was correct.
	There is no doubt that current productivity, on the basis of the 2005 figures, is very poor. It is at a record low, whether one measures it by growth in output per worker or by growth in output per hours worked. Productivity growth in 2005 was extremely slow—either the slowest since records began or at least since 1991, depending on which measure one follows. As for the projections, the Treasury continues to predict sluggish productivity growth in future years.
	The key question for the House to determine is what is causing this poor productivity. There are a number of reasons for it. First, the balance of the economy has changed, in the sense that the public sector is now bigger, compared with the private sector, than a few years ago. The productivity record of the public sector, particularly in health and education, is not impressive. It should also be acknowledged that it is difficult to measure productivity in that sector. In terms of progress and new evidence of growth, the Treasury's, "Productivity in the UK" makes that very point. None the less, the Office for National Statistics is attempting to find better ways of measuring productivity. Whichever method it uses, however, it tends to find a problem.
	On health, the ONS report produced by Tony Atkinson estimated the decline in NHS productivity as 1 per cent. per year since 1997. On education, the ONS changed its methodology to measure productivity—I am not critical of it for doing so—but the previous methodology suggested a decline of 2 per cent. per year in recent years. A more sophisticated approach still results in a decline of 0.5 per cent. per year since 1998. Whichever way one cuts it, productivity is not impressive in the public sector. That is the gist of the point made by my hon. Friend the Member for Beverley and Holderness.

Nicholas Soames: My hon. Friend is right that it is extremely difficult to gauge, but by any standards, by and large, productivity in the public sector is way inferior to that in the private sector.

David Gauke: That is absolutely true, and it brings me neatly to what I was about to say. Productivity in the private sector has also not been impressive in recent years, but the change in balance, with the public sector growing at the expense of the private sector, has reduced our overall productivity because productivity in the public sector has been particularly poor in recent years.
	There are a number of explanations for what is happening in the private sector. Many economists would argue that a large element of it is due not to policy failures but to what might be described as labour-hoarding. A number of businesses expect a slowdown in the economy, which means that there is less work, but rather than lay off staff—and expecting the slowdown to be followed by some economic growth, which would mean having to find new staff—they retain existing staff for longer than they might have otherwise.

Edward Balls: I want to be sure that I understand what the hon. Gentleman is saying. He seems to be saying that in the past, when the economy experienced a tough year, people were laid off, unemployment shot up and employment fell. Because nowadays people think that a tough year in the British economy will be followed by a return to growth, they do not lay off staff but retain them in their jobs. That is why in that particular year employment stays high and productivity figures are slightly lower. I understood the hon. Gentleman to be saying that that was good news for the British economy rather than bad news—or did I misunderstand?

David Gauke: The hon. Gentleman may find this hard to understand, but I was not making a partisan point. I know that this will be beyond his comprehension, but I am not claiming that labour-hoarding results from a failure of Government policy. All I am saying is that it is happening—that it is an observable fact. It is a good thing. If it is thought that the economy will grow and that it is therefore unnecessary to lay people off, that is clearly a good thing. There was no criticism in what I was saying at that point; but—

Edward Balls: But!

David Gauke: Yes, there is a "but". When labour is hoarded—if that is the correct phrase—and growth does not follow, there is more vulnerability to an increase in unemployment. If the downturn lasts longer than expected, there will be higher unemployment. That is a potential difficulty. In 2006 we are witnessing some increase in unemployment, perhaps suggesting that the labour-hoarding is unwinding to some extent. We shall see.
	There are, however, more substantial reasons why productivity has been so poor. One is the increase in regulation. According to the "Burdens Barometer" published by the British Chambers of Commerce, the cost of regulation has risen by £14 billion since 1998. The World Economic Forum says that since 1997 the United Kingdom has fallen from 13th in its league table to 30th in terms of Government regulation.
	The Chancellor focused a great deal on the City of London in his Budget and the papers that have been produced. The City faces great challenges and regulation, which in general are not domestically driven. They come not from the United Kingdom but from the European Union: the markets in financial instruments directive, for instance, is causing concern.
	Taxation is another problem. Business taxes have risen substantially. The Ernst and Young analysis shows that if North sea oil revenue is excluded, taxes are the highest that they have ever been. The level of taxation is not the only difficulty, however. We should observe what is being done by our competitors. We are to be taxed more heavily than Germany, and it is no surprise that Germany's growth is likely to exceed ours in the years ahead.
	We should consider not just our own taxation level, in absolute terms and relative to those of our competitors, but the complexity of taxation. Let me give an example. I know that vehicle excise duty is not a business tax, and I am not particularly critical of the policy per se, but it is rather characteristic of this Chancellor that we are to have seven different rates whereas once we had only one. That illustrates this Government's tendency to complicate matters. According to a World Economic Forum assessment, in terms of tax simplicity the UK is ranked 67th in the world, tied with Benin.
	A further element threatening productivity is the decline in business investment. The Chancellor said in his 2001 Budget that
	"To achieve our first ambition—to secure the fastest productivity growth of our competitors over the next decade—business investment must rise".—[Official Report, 7 March 2001; Vol. 364, c. 298.]
	That is not happening. Business investment is falling, in part because of the taxation and regulation that I mentioned earlier. It is now at a record low: about 9 per cent. of gross domestic product, which is the lowest level since records began in 1965.
	The British Chambers of Commerce and the CBI have offered substantial criticism of our skills levels. I know that more is being spent on education and I am not critical of that, but we must get the value for money that the Government have not achieved in the past. Until we get the full reforms that we need, I will not be all that optimistic. To be fair, the Government are moving in the right direction through their Education and Inspections Bill, but there is still a long way to go.
	This country has enormous advantages, such as the English language and strong cultural links with many other parts of the world. In an increasingly globalised world, we should be able to succeed, grow and prosper. There is cross-party consensus on the need to embrace globalisation, and we at least all talk about a belief in and desire for free trade, even if we do not always implement it. But our economy is becoming increasingly clogged up and it is less competitive and productive than it was. There are some fundamental economic issues that we need to face, and I fear that this Budget has completely failed to do so.

Peter Bone: It is a great pleasure to follow my hon. Friend the Member for South-West Hertfordshire (Mr. Gauke), who talked about productivity in detail and with great knowledge. Indeed, he somewhat embarrassed the Government.
	Yesterday was the first Budget that I had witnessed as a Member of the House of Commons. I got here very early to put my green card by my normal seat, only to discover that the place was packed with green cards. I felt a sense of great anticipation: this was going to be a packed House, and I was about to hear the iron Chancellor tell us about his great new reforms. According to the bookies, it was to be the right hon. Gentleman's last Budget as Chancellor, and he will be elevated to the role of Prime Minister very soon. So although it is always a thrill and an honour to enter the Palace of Westminster, I felt a little extra anticipation yesterday.
	The Chancellor spoke for just over an hour, but it seemed like three hours. After half an hour, a fellow Conservative whispered, "I've given up the will to live." Another said to me, "When does the Budget start?" I thought that they were simply being partisan, but I noticed on looking across to the Labour Benches that three Back Benchers had fallen asleep. Later, some of them left. I thought that the Front Benchers would be okay, but when I looked at the Deputy Prime Minister, I noticed that even he was enormously bored. The Prime Minister was grinning, but it was even more artificial than usual. So in that sense, I was very disappointed with the Budget. The leader of my party said more in eight minutes than the Chancellor said in over an hour.
	I thought that I should measure the Budget against the expectations of the people of Wellingborough, whom I regularly survey through my "Listening to Wellingborough and Rushden" survey. Of the issues that they mention, five in particular always come top: pensions, council tax, police and crime, education, and health. Wellingborough is a rapidly expanding town. Indeed, according to the Office of the Deputy Prime Minister, over the next 15 years 9,825 new dwellings will be created in one half of my constituency, and 6,800 in the other. So there will be an enormous increase in the number of people in the constituency. It worried me that the Budget provided no encouragement for first-time buyers. The small increase in stamp duty exemption did not even cover the average price of a new home for a first-time buyer. That was a little mean, and the Chancellor could have done better on that.
	One important issue in Wellingborough is pensions. I agree with previous comments about the 85,000 people affected by the failure of their company pension schemes. It is unfair that the Government have not dealt with that problem. If an ombudsman criticises the Government on an issue, they should take notice of what she says. We cannot let 85,000 people down through maladministration and do nothing about it.
	People are now beginning to realise the implications of the £5 billion that has been stolen from pensions each and every year, as their pensions are being slashed. I should congratulate the Chancellor on one point: he has put the tax burden up to its highest ever level, but he has done so cleverly. He has done it through stealth taxes that people have not noticed initially, but they are now all coming home to roost.
	In my constituency, a group of pensioners were so fed up that their pension was going up by less than the increase in the council tax that they started a campaign. They had public meetings, and shadow Ministers came to speak to them. What annoyed those pensioners so much was that the basic state pension was not going up enough to cover the increase in council tax in my constituency. They were also fed up with means-testing. Many people knew that they could get more money if they applied to the Government for pension credit, but they were not prepared to do so. They did not want the Government to know all their financial background. They thought that after paying in year after year, they should not have to go on bended knee to the Government for a few extra pounds a week. That is the problem with the pension credit. We should get rid of it and all the other bribes, and give people a decent pension. One of the few issues on which I agreed with my predecessor was that the millions, if not billions, of pounds of unclaimed pension credit could be added to the basic pension right now. I do not know why the Government do not do that.
	Council tax also comes high in the list of priorities for the people of Wellingborough. That is partly because we have had the biggest rise in council tax since it was introduced. Part of the reason why the councils have had to put up the council tax is the funding formula used to support the revenue grant. It is clearly based on historic evidence not future population growth, and we have lost out year in and year out.
	It is strange, however, that before the election, when Labour controlled the county council, the increase in revenue support grant was £7 million. The Conservatives took over, and this year's increase was only £2 million. That is wholly unacceptable—

Dawn Primarolo: I have listened carefully to the points that the hon. Gentleman has made, and he has so far produced a list of large spending commitments, over and above the Government's spending. I hope that he will tell us what policies his party has to raise the tens of billions of pounds that he thinks should be spent.

Peter Bone: I certainly will if I get time, but the Minister is being a little unfair—[Hon. Members: "Surely not."] Surely. I was arguing that there should be a fairer distribution of the revenue support grant.

David Gauke: I suspect that part of the costs to which the Paymaster General referred related to the loss of occupational pensions, which the Government constantly say will cost £15 billion to put right. Does my hon. Friend agree that it would be interesting if the Government could explain later in the debate how they reached that figure?

Peter Bone: As I understand it, the sum each year is not very much and there have been several suggestions as to how it might be covered.
	Policing and law and order are huge issues in my constituency. We shall be talking about extra policemen—and before the Minister jumps up again, I shall tell her how we would pay for them. People in my constituency want local policing; they want to see more police on the beat, catching criminals and deterring people from crime. The Government are doing exactly the reverse. They have come up with police support officers, but that money should be spent on real policemen.
	The Government talk about local policing, yet in my constituency the proposed amalgamation for an east midlands force means that we shall lose our local area. Our chief superintendent, who was based in Wellingborough, is now based in Kettering, and that east midlands force will cost millions and millions of pounds. Why not scrap the idea of regional police forces and spend the money on extra police officers?
	There has been much talk about education and about how much extra is being put into the education budget. Well, we are not seeing it in Wellingborough. Under the Labour Government, a Labour-controlled county council demolished John Lea secondary school. The sale of the site, including the school playing fields, raised £11 million, yet only £2 million was reinvested in my constituency. The destruction of that school means that all the town's other secondary schools have overcrowded classes, and people moving into the town with teenage children have problems finding a school for them.
	Thousands and thousands of new dwellings are being built in my constituency, but where on earth will the children go to school? There are not enough schools. Despite all the talk about education, education, education, it is certainly not happening in Wellingborough.

Edward Balls: In the hon. Gentleman's opinion, would the people of Wellingborough support the Government's proposal that we should raise the level of state spending to the level of private school spending, or would they agree with the shadow Chief Secretary that that would be throwing money away?

Peter Bone: I really am grateful for that intervention, because the people of Wellingborough do not believe anything the Government say about education—[Interruption.] They have seen a secondary school knocked down, but they have seen no more money, and they are having to sack teachers from primary and infant schools. [Interruption.]

Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman. Could Members on the Front Benches contain their discussions until they catch my eye?

Peter Bone: Perhaps I should move away from education, Mr. Deputy Speaker, as it was causing a bit of concern, but I shall finish the point I was making, as the hon. Member for Normanton (Ed Balls) wanted a reply.
	I do not believe a word that the Government say about education. I do not believe that any extra money will go into education in Wellingborough. The Government's history over the past nine years is that in Wellingborough educational provision has gone down. It may be great in the hon. Gentleman's constituency but it is not in mine, and the Government should take that into account. Wellingborough should receive its fair share of education spending.
	The most important issue in Wellingborough is the health service. As many Members have said, the Chancellor did not mention the health service at all. I am not really surprised. Dentistry in Wellingborough has been privatised, and I saw no commitment in the Labour party manifesto to do that. There were far more NHS dentists in Wellingborough in 1997 than there are today. If people can find an NHS dentist who will take them on, it is almost a miracle. On GP appointments, we have one of the lowest ratios of doctors to patients in the United Kingdom, and it was much better in 1997.
	The most important problem in the area relates to Kettering general hospital. There is no hospital in Wellingborough, and we should have a community hospital there. We hear that the Government are in favour of community hospitals, but there is no money for one in Wellingborough. However, the Government have a very useful formula for funding the NHS to make it fair across the country. That is a very good idea. The only problem is that when they announced that funding, they provided my area with only 85 per cent. of what the funding formula says the sum should be. [Interruption.] Labour Members may argue about that, but I am told that the reason why that happens is that other areas get more money.
	I am pleased that other areas get more than their formula share, but that is not good enough for the people of Wellingborough. All the talk of the formula and funding may not really mean anything to the people of Wellingborough, but when the local hospital must cancel 3,000 out-patient appointments and 600 operations, close a ward and an operating theatre, and transfer nurses from one area to another, that is when it comes home to roost.

Rob Marris: May I gently suggest to the hon. Gentleman that he check his figures on the formula funding in Wellingborough? I think that he will find that from 1 April 2007, no primary care trust in England will be below 95 per cent. of formula. I very much doubt whether his PCT is currently 15 per cent. off formula, because I think that I am right in saying that no PCT in England is anywhere near 10 per cent. off formula. So I urge him in his litany of doom and gloom for Wellingborough—it does sound dismal—to check his figures on the NHS.

Peter Bone: The figure that I cite has never been challenged locally. In fact, I am told that it translates into £21 million less for the local hospital. I am pleased to hear that progress will be made, but the Government always promise jam in the future, and I really do not believe it.
	Let me quickly consider some of the people who have been affected by the Government's action. I shall give some examples of what the Government have meant to patients in Wellingborough. Miss Major has been in agony. She has been admitted to the accident and emergency department on three or four occasions. She needs an operation. The operation was planned, but it was cancelled because of the cuts. Someone in my constituency is in agony, because of the cuts forced on us by the Government. Mrs. Baddock had to wait more than six months for her operation, yet the Government say that no one is waiting more than six months for an NHS operation. What they say and reality are completely the reverse. Mrs. Cutting has a heart complaint. In September 2005, she was told that she needed an electrocardiogram. I should not have thought that an ECG was a particularly difficult thing to arrange, but she has been told that she will not have one until November 2006. She has pointed out to me that it will be four years from when she first fell ill to when she gets any treatment whatsoever.
	Last night a constituent phoned me and said, "My father has to have a heart bypass. He had a heart attack in June 2005. Four times he's been admitted to hospital, Four times he's been ready for the operation, and four times it has been cancelled because of staff shortages." That is the reality of the NHS in my area.
	The Minister challenged me on how we would fund some of the extra commitments. Well, first, I congratulate the Government on scoring a century. Under their leadership, since 1997, £100 billion of taxpayers' money has been sent to the European Union—that so-called free trade area. Can they explain why £100 billion has to go to the European Union to provide a free trade area? If only half of that money had been left in this country, they could have met all the funding commitments without any problem whatsoever.
	This Government have failed us; this Chancellor has failed us. Whatever this Budget was, it was not a Budget for Wellingborough.

Tobias Ellwood: I am pleased to follow my hon. Friend the Member for Wellingborough (Mr. Bone), who spoke with such passion about how the Budget will affect his constituency. He started by talking about the hype that surrounded the Budget. I agree with him—for many of us who, for the first time, were able to sit in the Chamber and listen to the Budget, there was an awful lot of hype surrounding the event. In fact, one could describe it as a non-event. We had a 61-minute speech and lots of documents—1,000 pages in all, I think—but there was very little to tackle some of the challenges that we face today. There was nothing to assist productivity growth, pensioners or the NHS. When we remove the North sea oil revenues, we find that we are being taxed more now than ever before.

Dawn Primarolo: Will the hon. Gentleman explain to the House why he wants to take North sea oil receipts out of calculations of tax?

Tobias Ellwood: It has been a common practice to be able to read the two sets of figures: one with North sea oil revenues and one without. That gives a good indication to the public. They can recognise how much contribution is made from North sea oil.

Dawn Primarolo: Will the hon. Gentleman follow through by explaining whether it is his party's policy that, whenever a sector is doing well in the economy, its contribution to tax is to be removed from the tax calculation?

Tobias Ellwood: I think that the right hon. Lady is deliberately trying to mislead me. We are trying to show that if there is a significant sector that is contributing to the revenues and that is removed, it gives a good indication of what the rest of the economy is doing. I am not saying that we should take any one sector in isolation, but North sea oil provides such a large amount of revenue for this country that it is important that we are able to see both figures. As I said, that is common practice. It is nothing new.

Several hon. Members: rose—

Tobias Ellwood: I think that I will make a little progress, otherwise there will not be an opportunity for the winding-up speech.
	I am trying to convey that, because of what is happening to the economy, borrowing is not under control. This year, we are having to borrow £37 billion or, to put it another way, £175 billion over the next five years. That is all to do with over-regulation of our economy, and that also applies to businesses and affects growth. Productivity growth is falling from 2 per cent. to 1.75 per cent.
	Of course, there were some great headlines in the Budget. One of them was about education, which we have spoken about at length. However, when we analyse that—we have had a couple of days to look at the figures—we realise that the increase is less than 1 per cent. Another headline-grabbing bit of news was that pensioners are to get free travel during off-peak times. That is wonderful, but the measure does not come in until April 2008. The Chancellor failed to mention that.
	The Budget was promoted as a green Budget, but it contains very little to turn around the CO 2 figures that we face. We have heard many times the fact that, in the past five years, CO 2 emissions have increased rather than fallen. I am glad that the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) is now in his place. I hope that we will be able to meet our Kyoto targets, but I asked him whether we would meet Labour's manifesto commitments on greenhouse emissions. The answer to that is no. We will not be meeting them at all.
	Sadly, we spent much of today's debate discussing not the Government's initiatives, plans for Labour, or plans for Britain, but what the Tories and the Liberal Democrats would do instead. In the remaining days of the Budget debate, I hope that we will focus on how we can improve the situation with CO 2 emissions, instead of trying to second-guess policies that are yet to mature and be announced in their fullness.
	Where are the initiatives on rail transport? France is actively encouraging people to abandon their cars and use rail, but we heard nothing in the Budget about that. Indeed, there was nothing on cycling to encourage people to abandon their cars, specifically during the school run. We could easily help to tackle CO 2 emissions through VAT on aviation fuel, but again we heard nothing about that. All that we have heard is a lot of attacks on Tory policies.

Mark Lazarowicz: If all the matters that the hon. Gentleman thinks should have been covered in the Budget statement had been covered, it would have lasted a lot longer than the 61 minutes about which he is complaining. Is it now the case that the Conservative party thinks that there should be VAT on aircraft fuel, or an increase in air passenger duty? I would be interested to know—I might actually support it.

Tobias Ellwood: The hon. Gentleman falls foul of exactly the same thing that I accused him of earlier. He is trying to talk about Tory policy when we should be debating the Government's policy. There will be ample opportunity to discuss Conservative policy in due course, but today's debate is about the Government, not the Conservative party. Yes, we heard a 61-minute speech from the Chancellor, but there was not one mention of any of the initiatives that I have cited in the statement or in the 1,000 pages that were produced. [Interruption.] I will make some progress because I appreciate that we want to hear from the Front-Bench spokesmen.
	At the start of the debate, we digressed by talking about the NHS. The NHS is in crisis, but there was nothing in the Budget to alleviate it. We acknowledge that an extra £1 billion has been put into the NHS, but today we became diverted on to a debate about whether simply to throw money at something. That debate was entirely misleading. Conservative Members do not question the fact that extra spending must be put in, but it is the way in which the money is spent that is important. Reform must accompany spending, which shows the whole point of us scrutinising the money that is spent.
	Although Dorset has one of the worst-funded health authorities in the country, we are just able to make ends meet. However, as authorities in other parts of the country cannot do their sums and run their services correctly, £11 million is being removed from our health authority so that it can be given to other authorities. Dorset, which is doing well, is being made to suffer and yet another health authority will go into the red. That cannot be sensible, and it shows exactly why we need the reform about which I spoke earlier—[Interruption.] I get the message and will draw my remarks to a conclusion.
	I was pleased, on a personal level, by the announcement of the introduction of a charitable fund to help British victims of terrorist attacks abroad. Such a fund was absent until now, although Spain, France, the United States and other countries had introduced one. Adequate compensation was provided after people were sadly killed or affected by the 7 July bombings because of the Criminal Injuries Compensation Authority. However, those affected by an attack on Britons abroad did not get a penny because the compensation scheme is limited to British shores and travel insurance does not cover terrorism. I am pleased that the fund has been introduced and I ask the Paymaster General to give us details on when we will have a full announcement on how the process will work.
	The Budget was left wanting. An awful lot could be done and we need answers soon. We cannot wait until the comprehensive spending review to tackle problems with the NHS, the climate, the economy and, certainly, our support for pensioners.

Paul Goodman: It is a pleasure to respond to the second day of debate on the Budget, all of which I heard bar five minutes. I also spent two hours attending yesterday's debate, which was a great pleasure to listen to.
	I should like to respond to some of the points made in today's debate. The first Opposition speech was made by the hon. Member for Leicester, East (Keith Vaz)—who is not in the Chamber, but he may return. Almost the first thing he did was to make the extraordinary claim that he was inundated with telephone calls yesterday in support of the Budget. We regard that as very strange—I certainly have not been inundated with such calls, and neither have my hon. Friends. Perhaps he was making a bid to return to the Front Bench. Later, he said that the Chancellor's speech was too long at one hour and two minutes, so he may not return just yet. He made a very good point about the Olympics with which we wholeheartedly concur. He spoke, too, about the effects of terror—a point also rightly made by my hon. Friend the Member for Bournemouth, East (Mr. Ellwood).
	The hon. Member for Edinburgh, North and Leith (Mark Lazarowicz), who is in the Chamber, made a long speech—perhaps longer than he expected—on climate change, which is a subject on which he has great expertise. After 36 minutes he said, "Can I say briefly?", and he may wish to follow that advice in his next contribution. However, he made some very good and interesting points.
	The hon. Member for Wirral, West (Stephen Hesford) spoke about 56 periods of continuous growth. He was right to do so, but he did not make the point fully, as he failed to mention that many of those periods were under a Conservative Government. However, he reminded the House that we left the Government a golden economic legacy which, alas, they are not handling well, as we shall see.
	My hon. Friend the Member for Mid-Sussex (Mr. Soames) gave a masterly summary of the effect of government on business. My hon. Friend the Member for Beverley and Holderness (Mr. Stuart) dealt with productivity growth and cited some figures, to which I shall return. My hon. Friend the Member for South-West Hertfordshire (Mr. Gauke) made the same point and spoke, too, about the effects of regulation. My hon. Friend the Member for Wellingborough (Mr. Bone) dealt with the effect of the Budget on council tax in his constituency. He said that the Budget did not do anything for Wellingborough—he should know, as he is a fine constituency Member.
	We know full well that the Chancellor's annual Budget speech does not so much reveal the Budget as conceal it. We know from experience that the full truth about the Budget is contained not in the big announcements in the Chancellor's speech—there were not many such announcements in his speech yesterday—but in the small print of the Red Book. Page 180 shows that he has revised down long-term productivity growth from 2 per cent. to 1.75 per cent. His speech yesterday certainly did not reveal that fact—it concealed it. Page 252 shows that he has revised up his current deficit from £4 billion to £7 billion. His speech yesterday did not reveal that fact—again, it concealed it.
	The Chancellor claimed yesterday that it was a Budget for the environment, but page 262 reveals that he expects to take less, not more, revenue over the next two years from the climate change levy, although his speech did not mention that fact either. Above all, there is the issue of council tax. Page 186 of last year's Red Book includes the heading, "Building a Fairer Society", and lists 17 measures, the 15th of which is payment for the over-65s. An £800 million payment was to be made to help hard-pressed elderly people whose council tax bills have, in most cases, risen, and the value of whose pensions have, in many cases, fallen.

Stephen Hesford: rose—

Paul Goodman: I shall certainly give way to the hon. Gentleman. Perhaps he would like to explain why some of the money handed out to pensioners last year to help them with their council tax is not available this year.

Stephen Hesford: The hon. Gentleman is talking rather rapidly and becoming excited. He glossed over the issue of climate change, but I urge him to deal with the facts. Do the Opposition support the climate change levy in principle, and do they support the inflation rise applied to it?

Paul Goodman: If I am excited, I can assure the hon. Gentleman that that has nothing to do with the contents of his speech. On the climate change levy, we will introduce proposals at the next election. There are problems with it. That, I think, deals with him.
	Page 188 of this year's Red Book contains the equivalent table. The section headed "Building a fairer society" has shrunk to five measures. Perhaps the Chancellor has given up on building a fairer society. He has certainly given up on helping pensioners with their council tax. In that table an extension of the £800 million is nowhere to be seen. Could the withdrawal of special council tax help for pensioners have any connection with the fact that there was a general election last year?
	My right hon. and hon. Friends will no doubt argue that the withdrawal of help reveals last year's offer of help to be a cold, cynical, calculating pre-election bribe. I will not quarrel with that assessment, although my suspicion is that the withdrawal of that help is also the Chancellor's personal contribution to the Prime Minister's election campaign in May. Those elections will provide an opportunity for millions of disillusioned and angry pensioners to give their verdict on the Government's decision at the ballot box.
	I want to step back from the Budget and examine the seriousness and starkness of the economic challenge that confronts Britain's future.

Keith Vaz: Will the hon. Gentleman give way?

Paul Goodman: No, I must make progress and let the Paymaster General in.
	In 2050, China's share of world trade is estimated to rise to 24 per cent. North America's is estimated to fall by 2 per cent. to 23 per cent. The EU's share is set to fall by almost half to a mere 12 per cent., so the choice is clear. Even to maintain our position—to keep up with North American rather than European Union growth rates—we must compete to prosper. If we are to meet the challenge of the 21st century, the economy must travel in the right direction.
	We all know, or should know, what that means—high growth rates, improved competitiveness, better productivity, internationally competitive tax rates, light touch regulation, strong savings and investment with reform. Last year our growth was 1.8 per cent. It was not growth at North American levels. It was not even growth at EU levels. A 1.8 per cent. growth rate was below the EU average—indeed, I can tell the hon. Member for Normanton (Ed Balls) that we were 19th out of 25—below the Organisation for Economic Co-operation and Development average and below the world average, but the Budget will do little to take our growth, compared with that of our competitors, in the right direction.
	We need improved competitiveness. According to the World Economic Forum, as we heard, since 1997 we have dropped from fourth place in the competitiveness league table to 13th. In 1997 our share of world trade was 5.7 per cent.; last year it had fallen to 3.8 per cent. The Budget will do little to take our competitiveness in the right direction.
	We need improved productivity, as my hon. Friend the Member for Beverley and Holderness said. He pointed out that year on year growth in productivity is at its lowest since 1990, at 0.4 per cent. From 1992 to 1997, as he said, the improvement was 2.6 per cent. Under the Labour Government it fell to 1.3 per cent. The Budget contains little to take our productivity in the right direction.
	We need tax rates that are internationally competitive, but far from going in the right direction, our tax burden is going in the wrong direction. In 1997, our tax as a share of gross domestic product was just under 35 per cent. The falling line of tax as a percentage of GDP in Germany is about to cross the rising line of tax as a percentage of GDP in the UK. Page 266 of the Red Book confirms that tax as a percentage of GDP next year is expected to rise to 38 per cent., the highest rate for about 20 years.
	The USA, Canada, Australia and Ireland, as the hon. Member for Belfast, North (Mr. Dodds) pointed out, are following the same competitive path. In 2000, our business taxes were 10th from the OECD lowest; now, they are 10th from the OECD highest. The Budget will do nothing to make our tax rates more competitive or to make our tax burden go down rather than up. The Chancellor could not bring himself to admit yesterday that the Budget adds another £5.5 billion over three years to the nation's tax bill, already the highest since records began.
	We need strong savings, and it is here that the Chancellor is perhaps most culpable. My right hon. Friend the Member for West Dorset (Mr. Letwin) earlier quoted the Prime Minister in opposition. The Chancellor said in opposition:
	"I want the next Labour Government to achieve what in 50 years of the welfare state has never been achieved: the end of the means-test for our elderly people".
	What has happened to means-testing under the Government? When we left office, the percentage of pensioners who were means-tested was 37 per cent., whereas now it is 46 per cent. and climbing.
	What has happened to saving? Since 1997, the personal savings ratio has fallen by half. This Budget will do nothing to take savings in the right direction, any more than it will restore the £45 billion that the Chancellor has plundered from pension funds since 1997. Yesterday, the Chancellor could not even bring himself to admit that he expects the savings ratio to fall yet again next year, any more than he could bring himself to mention—I will be interested to see whether the Paymaster General can manage this—the words "Lord" and "Turner" in the same sentence.
	Above all, we need investment with reform. We have had the spending—money has been poured into hospitals, schools and child care—but we have not had the reform. Yesterday, the Chancellor had scarcely a word to say about, and no action to take, on the NHS. I concede that the Chancellor had plenty of words and an action plan for education, but it was an action plan with no timetable.

Edward Balls: Will the hon. Gentleman give way?

Paul Goodman: The hon. Gentleman has not been here for the whole debate, but if he will tell me whether he wrote the jokes in yesterday's Budget speech and what the timetable is for bringing public sector schools up to the standard of private sector schools, I shall give way.

Edward Balls: The hon. Gentleman has referred to the importance of tackling the challenge of globalisation through investing in productivity, and education and skills are particularly important. Does his party support our goal to raise the level of state spending in schools up to the level of private schools? Does he support that goal—yes or no?

Paul Goodman: The hon. Gentleman must be really slow. Of course we support the goal, but we want a timetable, which he did not give us. It is no wonder that when the Prime Minister needs support for real education reform—reform with a Conservative direction of travel—he has to rely on Conservative votes to get it through the House of Commons. The Chancellor will be pleased to hear that if the Prime Minister introduces real NHS reform with the same Conservative direction of travel, he will again be able to rely on our support to get it through, even if he cannot rely on Labour Back Benchers.
	As for child care, the House will be aware of rising complaints from private, voluntary and independent providers that the Government are driving them out of business because of the lack of a level playing field in child care, and today I can provide the House with new figures. According to Laing and Buisson's day nursery market report 2006, in the year to January 2006, 40,030 places provided by local authorities opened, but in the same year 17,715 day nursery places provided by the private sector closed, which is very serious. That is the first time that I have seen figures showing a decisive tilt from the private sector to the public sector, and that figure throws into question the Government's commitment to a mixed market in child care. Perhaps the Paymaster General will say what the Budget will do to provide a more level playing field in child care between the public sector and the private sector.
	The Budget will do nothing to deliver investment with reform, because we will not have investment with reform while we have a Chancellor who is the roadblock to reform. The vigour, creativity and strength of British business—strength largely achieved despite Government policy, not because of Government policy—are to some degree masking all those moves in the wrong direction. There is so much that is good in the British economy, but the economy could and should be even better. The great challenge presented to the Chancellor and to this Budget was the challenge of 21st-century change. There is no global pension fund waiting to be raided by countries that have run out of incomes to tax by stealth, and there is no international tax credit system waiting to bale out Governments who get into trouble. However, there is a global golden rule—that we must compete to survive—and it is a golden rule that even this Chancellor and this Budget cannot fiddle.
	The Budget should and could have put stability first by making the assessment of the Chancellor's fiscal rules independent. It could have sent Britain in the right direction, but it did not do so, because this is an old-fashioned, tax-and-spend Chancellor who has run out of ideas and who is running out of time. Yesterday, he ran away from using his Budget to tackle the crisis in our health service. He is a Chancellor who is preparing himself for the premiership and not preparing Britain for the future. This is a Budget for Brown, not a Budget for Britain.

Dawn Primarolo: The past two days of the Budget debate have covered a great deal of ground, with hon. Members asking several questions that I will do my best to answer in the remaining time. Let me start by mentioning the specific questions that the hon. Member for Bournemouth, East (Mr. Ellwood) asked about the announcement of the new fund to support victims of terrorist attacks here and outside the UK. I hope that he accepts that it would be better if I wrote to him in order to do justice to a subject about which he is very concerned and with which he has been deeply associated, because I could not do it justice in this short time.
	This has been a wide-ranging debate to which the contributions made by Conservative Members can be summed up thus: "We want to discuss climate change but we've got nothing to add, we want to discuss pension policy but we've got nothing to add, we want to discuss the national health service but we've got nothing to add, and we want to discuss education but we've got three different commitments." First, we had the hon. Member for Chipping Barnet (Mrs. Villiers) telling us that the Conservatives will not honour the commitment on the expansion of education. Then we had the right hon. Member for West Dorset (Mr. Letwin) saying today, "It sounds like a nice idea—we'll think about it." Then, by this evening, we had the hon. Member for Wycombe (Mr. Goodman) saying, "Yes, we will match it." The problem throughout the debate has been that the Conservatives have no policy with which to engage in it.

Keith Vaz: On the hon. Member for Chipping Barnet (Mrs. Villiers), who was of course missing from her Front Bench during the opening speech, I was e-mailed a copy of "In Touch", the Conservatives' newsletter in Oakleigh ward, with a picture of her and the caption,
	"Theresa gains another signature for her petition for more police".
	Is not that a call by the hon. Lady for more expenditure, not less?

Dawn Primarolo: I think that the case is made. The hon. Lady, like many Conservative Members, wants to stand in this Chamber and decry public expenditure and call for it to be cut, then they go back to their constituencies and demand more expenditure and investment in public services. During today's debate, the hon. Member for Mid-Sussex (Mr. Soames) was the only Conservative Member to show the good grace to give credit to the Government where it is due.
	The Budget announced yesterday by my right hon. Friend the Chancellor demonstrated a vision for a modern Britain leading on enterprise and prosperity and leading in opportunities and fairness. It sets out world-class public services and an ambition to build on a platform of stability and growth. As my right hon. Friend said, we have had 54 quarters of consecutive growth—the longest expansion in British history. This is a stable economy, with inflation at the 2 per cent. target, interest rates low and record employment. The crucial difference between this Government and the previous Government is record levels of employment, with more than 2.3 million more jobs since 1997.
	My hon. Friend the Member for Leicester, East (Keith Vaz), who spoke eloquently in support of the success of the Budget, referred specifically to the textile industry, on which he has campaigned a great deal in this House. The UK remains a good place to start and grow a business, with the World Bank study, "Doing Business in 2006", placing the UK at the top in the European Union, with the best business conditions. Support for local business environments through the local enterprise growth initiative, worth £50 million next year, is an important contribution to that, as is the improved access to finance for small businesses through the enhanced incentives to invest in small businesses through venture capital trusts.

Gregory Barker: rose—

Dawn Primarolo: If the hon. Gentleman will let me make a little progress, I will certainly give way to him if I have time.
	Yesterday, my right hon. Friend revealed a vision for modern Britain and detailed the reforms that will effect it and make the UK the location of choice for business, with more investment in skills and education. Those reforms will help us to meet the challenge of climate change. I shall deal with the points that hon. Members made about that shortly. The reforms will be embedded in our public services for long-term efficiency.
	Let us be clear about the economy's current position. The UK economy has coped well with the challenges in 2005. They include sustained higher oil prices, weak euro area demand and a subdued housing market. Under the stewardship of the Conservative party, all those factors would have driven the economy into recession. The Organisation for Economic Co-operation and Development described the UK economy as a paragon of stability. The International Monetary Fund emphasised that macro-economic stability remains remarkable in the UK. In the nine years since 1997, the UK economy has grown by 24 per cent. In the previous nine years, under a Conservative Government, it grew by 15 per cent. If growth in the past nine years had been the same as in the preceding nine years, the average household would be more than £3,300 worse off than it is today.
	Conservative Members also try to manipulate figures when describing tax revenues and rises. It is crazy and demonstrates why they are not fit to run the economy. They tell us that, by excluding North sea oil revenues, we somehow have the highest tax take. That is simply not sensible. What are they thinking about? If they take out North sea oil, will they also take out the financial sector and its receipts when it is doing well? Of course not.

Gregory Barker: Will the Paymaster General give way?

Dawn Primarolo: No, not at the moment. When North sea oil is included, the tax take is not as high as the peak in 1984. The OECD measure—the approved, internationally comparable measure of the tax burden—states that, in the UK, we rank below the OECD average and the European average. Indeed, every year since 1997, the tax burden has been below the peaks that were reached in 1984–85. Let me remind Conservative Members that some of the choice measures that they included in their previous Budgets included VAT on fuel and increasing VAT to 17.5 per cent. The Conservative Government cut advance corporation tax in 1993 and had the same effect on funds as they claim that the Government are now having.

Gregory Barker: Will the Paymaster General give way?

Dawn Primarolo: No, I shall answer the questions that hon. Members have asked and, if I have time, give way to the hon. Gentleman.
	The hon. Member for Mid-Sussex made many points about pensioners. I agree that every hon. Member should be concerned about that, but I want to remind him of a few factors. Reforms to pensioners' tax and benefits since 1997 have meant that pensioners are, on average, £27 a week better off and the poorest third of pensioners are £39 a week better off. Let me put it another way: 2.1 million pensioners have been lifted out of absolute low income between 1996–97 and 2004–05, and more than 1 million have been lifted out of relative low income in the same period. They became the victims of low income and poverty under the previous Government's policies.
	I stress to the hon. Member for Mid-Sussex that, of course, it is important to have an effective pensions system in future. Lord Turner's contribution to the debate and the Government's response will ensure that a carefully considered programme that balances the principles of personal responsibility, fairness, simplicity, affordability and sustainability, is implemented.
	The hon. Member for Belfast, North (Mr. Dodds) also asked about the ombudsman's report. He acknowledged that the Department for Work and Pensions had made a considered response to it and I do not believe that I can add anything to that. However, in May 2004, the Government set up the financial assistance scheme, covering 15,000 people, and we have made a commitment to review the fund for the scheme.
	The health service was mentioned repeatedly. Let us get a few things straight. The Government's plans for the NHS were set out in the Budget of 2002, providing clear plans for right up to 2008, offering long-term certainty for the NHS in order for it to plan. Since 1997, UK health spending has risen from the £33 billion that we inherited from the previous Conservative Government to £97 billion, representing a 7 per cent. real-terms increase per year. Now, 99 per cent. of people suspected of having cancer are seen by a specialist within two weeks, and we no longer have to listen to horrendous stories in our surgeries resulting from Conservative Government policy. If the Conservatives want to know where the money went, I shall tell them. It has gone towards 660,000 more operations and 1 million more elective admissions each year. These represent increases of 88 per cent., 89 per cent. and 108 per cent. in people's treatment.
	Alongside that, there are now 79,000 more nurses and 27,000 more doctors. By the end of the 2004 spending round, the NHS will have 90 per cent. higher spending in real terms than it did in 1997. The money has not gone to pay for managers' salaries, as Conservative Members insist on saying. NHS managers now comprise 3 per cent. of the staff, whereas that figure was 5 per cent in 1997, so the percentage is falling under this Government.
	The hon. Member for South-West Hertfordshire (Mr. Gauke) made a measured contribution, in which he mentioned productivity. He had the good grace to acknowledge that, in the public services—including the national health service—measuring and improving productivity presented a challenge. However, the NHS report shows improved productivity as a result of lower levels of staff sickness and the reduced use of agency staff in 2004–05, which freed up about £60 million more for patient care. But, of course, it cannot end there.

David Gauke: I think that I am grateful to the right hon. Lady for her kind words, although they will probably not do my career any good. None the less, there is still a problem with productivity in the health service. I am grateful to her for saying that I made a measured contribution, but I have to tell her that productivity is very poor in the health service, just as it is in the education system. I accept that it is difficult to measure, but according to any measurement, we have a problem in our public sector.

Dawn Primarolo: The hon. Gentleman must know, because he appears to follow these discussions closely, that the Office for National Statistics has done some work with us on this matter and that it has produced a paper showing a range of measures to illustrate where productivity is increasing in education and in health. The ONS acknowledges that these measures represent staging posts towards an ongoing programme to improve productivity in regard to information, so that we can get a much fairer picture of what is going on. We are clearly flagging up that this is about getting accurate and timely information to give us a proper assessment of the productivity.
	The hon. Member for Wellingborough (Mr. Bone) said that there was no encouragement in the Budget for first-time buyers. Mortgage rates are at their lowest levels since the 1950s and the cut in the cost of mortgages has resulted in a level that is now about £4,000 a year. Interest rates, at 4.5 per cent., remain close to their historic low levels and it is estimated that there will be about 2 million more home owners by the end of 2006 than there were in 1997. That shows that the Government are introducing precisely the kind of measures that assist home owners by providing stability, low interest rates and certainty.
	The hon. Member for Mid-Sussex raised the question of spending on housing, and he was right to do so. It is important that we invest in social housing as well. I can tell him that investment in housing is growing at 4.1 per cent. in real terms from 2004–05 to 2007–08. That compares with 0.2 per cent. from 1979 to 1997. The extra resources are going to every area in England, and the devolved Administrations will receive the Barnett consequential rises.
	The hon. Gentleman also made a number of eloquent and pertinent points about defence, diplomacy, the role of the Foreign Office, the importance of the diplomatic service and the contribution made by our armed forces. I entirely agree with him. Such issues are very much in the minds of Ministers as they come forward in the negotiations and discussions with the Chief Secretary on the spending reviews and consider carefully how we balance all our commitments.
	There was a great deal of discussion about the environment and the contributions of Opposition Members can be characterised by the words, "We wish the environment were better, but we don't know how to do that." The Budget has set out the next stages in the Government's strategy to tackle the global challenge of climate change, and that includes measures to encourage energy efficiency in the business sector and an increase in the climate change levy in line with inflation as from April 2004.

Stephen Pound: Will my right hon. Friend give way?

Dawn Primarolo: Will my hon. Friend forgive me if I do not give way? [Hon. Members: "Aah."] Okay, he has charmed me.

Stephen Pound: I am very grateful to my right hon. Friend, but I fear I may disappoint her. She will be as familiar as the rest of the House with the theoretical journal of the Conservatives in Oakleigh ward. In view of what she has just said, did she realise that Councillor Gerard Silverstone, who lives in Brighton but represents constituents in Barnet, is somehow taking advantage of the very transport policies that she has just shared with the House? Does she think that it is an unexpected consequence of our policy and is it one that she now regrets?

Dawn Primarolo: My hon. Friend makes a very interesting point, which I may need a little longer to reflect on than I have this evening. The climate change levy package has made a significant impact on energy consumption if not the travel arrangements of the councillor whom my hon. Friend mentions.
	The levy is encouraging businesses to improve their energy efficiency and, as a country, we are reaching our Kyoto targets. We will publish shortly a climate change programme review that will set out the way forward. As Members have rightly pointed out, we need to do more than our Kyoto targets.
	The Government are also using the "polluter pays" principle in the implementation of our environment policies. This principle ensures that, by using tax, we can influence behaviour. That is precisely what we have done. As my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) said, far more needs to be done to achieve our objectives.
	This has been an interesting two days of the Budget debate. I regret that, because of time, I cannot answer every point that Members made, but I look forward to their participation in considering the Finance Bill, so that we can discuss it in detail. I commend the Budget, which adds measures to enhance our national position as a prime location for inward investment, promotes London, invests in skills, reforms our education and training programme, makes sure that we have the employment skills that we need for the future—
	It being Six o'clock, the debate stood adjourned.
	Debate to be resumed on Monday 27 March.

PETITION
	 — 
	Pelican Crossings

Bob Spink: Over the last decade, there has been an increasing acceptance by both the public and politicians that road safety for pedestrians, particularly children, the elderly and disabled people, must come above convenience for the motorist, especially around schools and shopping areas and where fast roads must be crossed. I pay tribute to Mrs. Johnson and each of the 400 or 500 signatories to her petition, which states:
	To the House of Commons.
	The Petition of the residents of Canvey and others,
	Declares that we the residents of Canvey Island and surrounding areas wish to formally record our concerns regarding the lack of safe crossing points on High Road, Canvey Island for pedestrians, particularly the elderly, disabled and those with children.
	The Petitioners therefore call on the House of Commons to urge the Government to impress upon Castle Point Borough Council the need to install a new pelican crossing on High Road, Canvey Island, as requested by the Member of Parliament, to improve safety for all pedestrians.
	And the Petitioners remain, etc.
	To lie upon the Table.

MR. OMID FARIVAR

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dhanda.]

Clare Short: I want to raise the case of Omid Farivar and his family, who are asylum seekers from Iran living in my constituency. Over the years that I have been in the House, I have dealt with many hundreds and probably thousands of asylum cases. Some have been distressing, and some disturbing, but probably none has been worse and more worrying than this one. I have therefore written to the Home Office and the Minister on a number of occasions, and have asked for a meeting with the Minister, which he refused. I am therefore bringing the case to the Floor of the House to try to draw the Minister's attention to this case's extremely distressing features, which inspire compassion, in the hope that I can get him to reconsider.
	All of us who deal regularly with asylum cases know that there has been a continuing hardening of attitudes in the Home Office in recent years, and a growing unwillingness on the part of Ministers to use the discretion given them by Parliament to deal with cases that truly arouse compassion. I still find it hard to believe, however, that any UK Minister, let alone one who claims to be a Labour Minister, can possibly refuse this case. If I do not achieve a reconsideration by the Minister, my concern is that the doctors of my constituent's 13-year-old daughter fear that she is unlikely to reach the age of 14 and extremely likely to commit suicide. I will come to the evidence of that in a moment. In addition, her father, if returned to Iran, is very likely to be executed.
	I should stress that I am anxious not to identify the family too closely. I have given the name of my constituent, and I hope that that will not cause ramifications. The obvious reasons for my hesitation are those of privacy and concern for the mental health of the daughter, but also that the family are fearful of any consequences of publicity here for their family in Iran. My regional television company, Central television, was anxious to take up the case and interview the family. Although that might have helped them, they refused, because they fear what might happen at home if they draw attention to themselves.
	My constituent is a graduate in chemical engineering. For a time, he was a lecturer, and then became a development and research manager in a substantial factory. His wife is also a chemical engineering graduate, production manager and part-time chemistry teacher. Obviously, the family are highly educated and were living comfortably in Iran.
	In February 2003, however, my constituent was involved in a road traffic accident in which a child was seriously injured. That was obviously a tragedy, but it turned into a nightmare for the family, because the boy was the son of a high-ranking member of an Islamist group referred to in Iran as Hizbullahi—as I understand it, all such groups are fanatically supportive of the Government, but this particular group is especially fanatical, tends to enforce Government rules, and is known as Feshar. My constituent tells me that its members are hard-line militant enforcers of Islamist rules.
	After the accident the police went to the scene, talked to witnesses and took my constituent to a police station, where he was held for three days. The father of the boy then went to the police station and claimed that my constituent had knocked the boy over on purpose. He kicked and beat him. At first the police were inclined to stop that, but when the political-activist senior figure said that my constituent had knocked the boy over on purpose they joined in, and he was beaten very severely.
	On the second day, my constituent was asked to sign a confession. He resisted, but was beaten more and then gave in. The confession stated that he had deliberately injured the boy because he was trying to harm the father, and that he had been drinking alcohol. That was all completely untrue, but he signed the confession because he was beaten. He was then taken to court, and was detained while they waited to see what would happen to the boy. He was in prison for two to three weeks; then the boy sadly died.
	My constituent's family experienced great difficulty in getting any solicitor to represent him because of the political position of the boy's father, but eventually they found a solicitor who secured his release from prison on bail. When the boy died, however, he was detained again. The court then ordered him to pay blood money or be executed. Obviously he accepted the order to pay blood money, but in such cases the offended party must agree. The boy's family would not accept blood money, but said they would agree to accept it and would not demand execution if my constituent agreed to engage his 11-year-old daughter to the brother of the boy's father, a 42-year-old. The boy's father also went to see my constituent, and said that even if my constituent was executed he would follow his family and take the life of a young person to pay for the life that his own family had lost.
	My constituent then talked to his wife and father about what he should do. He thought that perhaps he should accept execution to release his family from the pressure that they were under, but they said "No: agree to the deal. Then at least we can get you out of prison, and try to find a way forward." He therefore accepted the deal and paid the blood money, which he tells me was 15 million toman. I have no idea how much that is, but I imagine that it is a substantial sum.
	Then the daughter was engaged to the brother, but whenever the man called at their house she would shake in fear. Her father felt absolutely dreadful, and decided that he could not do it: she was too young. Then his father paid a people-smuggler—one of those people who now run the asylum system of the world—to take the family out of the country. But the smuggler was arrested—I do not think that it was to do with this case—and put in prison, so the money was lost and that plan did not work.
	The fiancé—the 42-year-old brother—kept calling at my constituent's house to see his daughter. My constituent said that he could not accept it any more. He dismissed the engagement, and returned the presents that the fiancé had brought.
	Before the engagement, the family of the boy who had died in the accident had come to my constituent's house, broken windows and harassed and threatened the family. All that stopped when the engagement was on, but after it was broken off the attacks started again. That led to an invasion of the house. The invaders found the satellite television, which is illegal in Iran. They also claimed to have found political books and alcohol. My constituent tells me that he did have a satellite television, but did not have political books or alcohol. He was not involved in any political activity in Iran. However, the allegations were being made by a political faction, which made him into a political prisoner.
	My constituent was then taken to the fanatical group's own prison, which he tells me was very nasty, like a cage, with sharp needle-like pieces of metal embedded in the cement of the floor. He was there for 10 to 12 days. There was no light, and he did not know whether it was day or night. He was taken out of the cage and beaten, then put back, many times. He was then released, because his father had paid a lot of money for him to be released, and told to report to the group daily. He tells me that there are special courts to deal with political offences—Islamic revolutionary courts.
	Given the doubts of the regrettably misinformed adjudicator in the case, let me say that Human Rights Watch is very clear about the fact that there are political courts in Iran: there is no question about that. My constituent was not politically active, but he was accused by a political faction of being politically motivated, and was therefore treated as a political prisoner.
	My constituent's father, having got him released from prison, looked for a way to get him and his wife, son and daughter out of the country. They found and paid a people-smuggler, who got them false visas on their real passports. By now, they were not staying at home but moving between friends and family. Then, they got the message to go to the airport very early on a fixed day. The smuggler gave them their passports and told them which passport check-line and door to go through. My constituent assumes that people were bribed to let them through. They did not know until that morning where they were going. They had no motivation to get to the UK; they just wanted to get out of the country and the danger that they were in. They were given tickets and told to rip up their passports on the plane and to apply to UK authorities when they arrived, which they did. My constituent knew nothing whatsoever of asylum or any asylum seekers before he came to the UK.
	Since the family have been in this country, the daughter has had constant nightmares and will not eat. Her doctors have written medical letters to me; indeed, they are so worried about her that they have even come to see me at my advice bureau. They are extremely fearful that she will commit suicide. I have provided the Home Office with copies of those letters. Dr. Usha Jayarajan, clinical psychologist, and Dr. Irene Lampert, consultant child and adolescent psychiatrist, of Birmingham Children's hospital—a fine and prestigious hospital—say that the girl
	"suffers from Post Traumatic Stress Disorder and associated Mood Disorders."
	She
	"has difficulty sleeping, waking frequently from frightening nightmares where she sees the cyclist who died in the accident in Iran, covered with blood and chasing her with knives in his hands, threatening to kill her and her family."
	When she is awake
	"she sees people who are walking towards her as the cyclist covered in blood and becomes afraid that he is going to kill her".
	She
	"experiences many symptoms of acute anxiety; she is sweaty, dizzy, trembling hands, fidgety, palpitations and suffers from headaches."
	On one occasion, she
	"became dizzy resulting in her falling and breaking her leg in three places."
	She
	"is visibly very tense and has a constant sense of dread"
	and
	"is unable to eat as it makes her feel nauseous."
	When she is awake,
	"she reports finding it difficult to think about anything other than the events that led them to flee Iran and how terrible their situation is now, compared to the comfortable life that they had prior to the accident."
	She
	"has a sense of despair and hopelessness resulting in a persistent wish that she were dead. She has tried to persuade her mother to agree to a suicide pact for the whole family."
	The letter continues:
	"As we have already indicated, a strong feature of"
	the girl's case
	"is her persistent wish to kill herself. It is our strong belief that if"
	she
	"believed that she was to be returned to Iran she would make a serious attempt to kill herself, and would quite possibly succeed, before she ever reached there."
	Since that letter was written, I have received a further letter from the doctors. It states that
	"the situation has gone from bad to worse."
	The father is now deeply depressed and there is a lot of blame between daughter and father for what has taken place. The letter continues:
	"We have a very real worry, that if the situation is not swiftly resolved, i.e. the family are given permanent permission to stay, then"
	she
	"is not going to make a recovery."
	The doctors have discussed the case with a senior hospital figure, and they are all worried that she
	"will not see her 14th birthday. If this were to be the case, then the subsequent impact on the rest of the family is too horrific to contemplate."
	As if that were not bad enough, since the family has been in the UK the son has developed leukaemia. A letter from a consultant paediatric haematologist at Birmingham Children's hospital—I have sent a copy of it to the Home Office—dated 7 June 2005 states that the son
	"was first diagnosed with acute myeloid leukaemia at the beginning of March 2004 and he received intensive chemotherapy until August 2004. He is currently in remission and on regular follow up. He is not requiring any active treatment at present although there still does remain a significant risk of disease relapse, particularly over the next two to three years . . . treatment was quite intensive and we are continuing to monitor him in the Outpatient Department for any sign of toxic effects following this treatment. He does have a significant risk of relapse and if this occurs he will need intensive further treatment and bone marrow transplant. Were he to return to Iran it is unlikely he would get the sort of follow up that would pick up complications following his treatment and secondly should his disease relapse, he will not have access to multi-agent chemotherapy and transplant as would be available in the U.K. Even should he relapse, he has a good chance of being cured with further intensive treatment."
	The tragedy of the boy comes on top of the rest of the tragedy for that family.
	Since they have been in the UK, they have kept in touch with the father and mother of my constituent. Their house has been invaded twice by that fanatical group and they have been beaten on both occasions. After the second invasion, the mother had a heart attack, but is still alive.
	My constituent is a very intelligent, calm and reflective man. There is no doubt about the sincerity of his belief—I have been to their house and spoken with them at some length—that if he is sent back he would be sent before a political court, because he has been accused of political activity, and probably executed. His children would also be targeted, as was threatened.
	I have written to my hon. Friend the Minister and asked for a meeting. His letter of 6 March relies on an adjudication that turned down the family's case. Some of the medical evidence that I have given today was not put before the adjudicator, but the adjudicator simply did not believe the story. There is no doubt in my mind that the adjudicator was simply wrong. The reason Parliament gives Ministers discretion is so that they have the right to overturn a decision when the adjudicator gets it wrong.
	It is notable also that in October 2003, before the adjudication, the Home Office argued that the general human rights situation and freedom of speech in Iran were improving, and the country was in a state of transition. I hope it is accepted—it is certainly the rhetoric of our Government—that since the 2005 elections and the appointment, in particular, of Mostafa Pour-Mohammadi as Minister of the Interior, that is emphatically no longer the case. He was previously involved in a decision to execute thousands of political prisoners in 1983, an event that Human Rights Watch considers a serious crime against humanity under international human rights law.
	That is the case that I am bringing to the Floor of the House and before the Minister tonight. I am sure that he is very busy and has many cases to consider. Perhaps he has not in the past had time to consider all the details of this case, but I ask him to please, please use his discretion to allow the family to remain in the UK on compassionate grounds because that would save their lives. They are a very nice and highly educated family and, if allowed to stay, I am sure that they would be very good citizens of our country.

Tony McNulty: I congratulate my right hon. Friend the Member for Birmingham, Ladywood (Clare Short) on her success in securing the slot for an Adjournment debate today. As she knows, these occasions provide Members with an opportunity to raise in some detail on the Floor of the House issues of a constituency nature. I have to say, for reasons that I will discuss, that I was a little disappointed by her choice of subject, not least because, as she knows only too well, we have been in fairly regular correspondence about the case to which she refers.
	I have, as my right hon. Friend knows, taken the time to respond in some detail about the case. However, as a matter of principle, it would not be right for me to discuss on the Floor of the House or in any other public forum the particular circumstances of this or any other asylum case, and I will not do so today. I also consider it inappropriate to discuss this case on the Floor of the House because the applicant's legal representatives have applied for the case to be heard before the High Court under judicial review, and that application remains outstanding. In that context, it simply is not proper for me to discuss the substance or the individual circumstances of the case. I receive numerous requests from MPs to meet and discuss specific cases, and where appropriate I do so. I also receive numerous requests to use my limited discretion, and where appropriate I do so.
	I do not agree with my right hon. Friend's contention that there is a growing unwillingness to listen to cases or a hardening of attitude at the Home Office, for reasons that I shall outline as I set out the broad general principles.
	My right hon. Friend is more than aware that asylum and human rights applications are considered by the Home Office on their individual merits, in accordance with our obligations under the 1951 UN refugee convention and the European convention on human rights. When cases are assessed as well founded, we provide protection by granting asylum to those who meet the definition of a refugee under the 1951 convention, and by granting humanitarian protection to people who are not refugees but who would face a serious risk to life or person arising from torture, inhumane or degrading treatment or punishment, the death penalty or unlawful killing, and who are not subject to specified exclusion criteria.
	Each application is considered against the background of the latest available information about the situation in the country of origin. Full account is taken of the ability of the individual concerned to reside safely in other parts of their country when it is not safe for them to return to their home area. By the bye, however busy I am—and I do not deny that everyone is busy—I take each and every case that comes before me extremely seriously, and read them in as much detail as necessary.
	The Government firmly believe that the right approach is to continue to assess carefully the protection needs of individuals on an individual basis. Similarly, returns are taken forward on a case-by-case basis. We enforce the return of an individual only when we are satisfied that to do so would not put the person at risk.
	As my right hon. Friend knows, since the new single-tier appeal system was introduced in April 2005, unsuccessful applicants have been able to appeal to the Asylum and Immigration Tribunal. If unsuccessful at appeal, an applicant may submit an application to the tribunal for a review of the decision. The AIT is an independent body established by Parliament to adjudicate on matters of that kind, and I would not normally intervene where an applicant's appeal had been dismissed by the tribunal, except in the most compelling circumstances. In cases where an applicant still has an avenue of appeal, such as an application for judicial review of an immigration decision, it would not be appropriate for a Minister to intervene.
	As my right hon. Friend knows, the Government expect all asylum seekers found not to be in need of international protection to return to their country of origin. Help and advice for those who want to return voluntarily can be obtained from the immigration office dealing with the applicant's case. Alternatively, such help and advice can be obtained from the International Organisation for Migration, which is an independent body.

Clare Short: I did not know that there was a judicial process, but I have two questions for my hon. Friend. In a case such as this, when he will not agree to meet me and has turned everything down, yet I genuinely and sincerely believe—as do her doctors—that a child is likely to kill herself because her father's life is in danger, how does he recommend that I take the case forward? Secondly, if the judicial process does not lead to success, will he agree to meet me to discuss the case?

Tony McNulty: Members find ways and means of raising aspects of cases each and every day. I shall not comment directly on the outcome of the judicial process until it is complete. We are doing all we can through the immigration and nationality directorate, to ensure through correspondence, e-mail, hot lines and so on, that any subsequent information that a Member wants to submit about an individual case can be taken fully into consideration. I spend much of my time deferring decisions on removal directions or other aspects of cases so that new information—if it is genuinely new—can be put before the caseworker concerned, or me.
	With the greatest respect, I have to point out that with the best will in the world, the issue is not simply about meeting the Minister in every instance. I meet individual MPs and they talk to me about cases and raise specific points with me every time I am in the House. It is right and proper that I should make myself available in that way. As and when appropriate I meet MPs on a regular basis, but I do not do so in every case where a Member has requested a meeting. I do not think that doing so would be fair on the MPs, given the expectations that may or may not be raised with the applications or the general process that I undertake in dealing with cases.
	I hope that my right hon. Friend will accept that things are improving in our interactions with MPs in such cases. We are doing all we can to improve not only the decision-making process and the information made available during that process, and how the IND and the Home Office work with MPs and their caseworkers and correspond about cases, but more broadly in creating a more robust asylum process, rooted in the 1951 convention, which is and must be our starting point.
	In conclusion, the IND and the Home Office are doing things far more efficiently, but not in the context of a more hard-headed approach or a growing unwillingness to use discretion. Of course the asylum system, rooted in the 1951 convention and the European convention on human rights, is and should be about dealing with political repression and the circumstances of specific cases and their ins and outs. Rather than going into the specifics of a case—to be perfectly honest, it would be inappropriate to do so on the Floor of the House or in any public forum—it is right and proper that I have dwelt on the broader issues that I hope will be of some use to my right hon. Friend.
	Question put and agreed to.
	Adjourned accordingly at twenty-six minutes past Six o'clock.